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Accounts receivable days has revenue in the denominator while Accounts payable days has Cost of goods Sold in the denominator. The logical explanation to this
Accounts receivable days has revenue in the denominator while Accounts payable days has Cost of goods Sold in the denominator. The logical explanation to this is No particular logic, it is just strictly follow the established formula. Accounts receivable is an asset, while Accounts payable is a liability. It depends on the financial policy followed by the business organization. Adherence to the Accounting standards which clearly links Accounts receivable to Revenue and
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