AVERAGE PAYMENT PERIOD Definition

AVERAGE PAYMENT PERIOD (APP) is the number of days an entity takes to pay off credit purchases. As the average payment period increases, cash should increase as well, but working capital will remain the same. Formula: accounts payable / (total annual purchases / 360).

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CEO is an acronym for Chief Executive Officer. The CEO is the principle individual responsible for the activities of a company.

STATUTORY DEDUCTIONS are those deductions that are required by law or regulation, e.g. payroll taxes deducted from wages.

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