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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IMPERSONAL LEDGER see LEDGER.

STRIPPED YIELD is the annual dollar dividend of a preferred stock divided by its stripped price.

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