CASH CYCLE Definition

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CASH CYCLE is the length of time, normally stated in numbers of days, between the purchase of raw materials and the collection of accounts receivable generated in the sale of the final product.

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DISCOUNT ALLOWED, normally, is a reduction of the invoice amount for early payment of the invoice value.

TRADE SPENDING is that marketing expense directed towards brand building, e.g. promotional allowances, slotting, and advertisements. Total expenditure often represents 20-25% or more of total sales and is a significant expenditure for any size company. Managing this investment more wisely and reducing any fraction of a percentage of these dollars is vital.

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