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How would an overstatement of revenue would lead to a reduction in receivables Collection period?
It’s a useful technique with any ratios to make up some numbers:
Suppose receivables = $30k and revenue = $300k => 36.5 days (30/300*365)
Now inflate revenue to $450 or $600 …. what happens to the number of days?
Also if you post to the ask the tutor forum, I answer posts every day.
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