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While trying to understand the equation, I had a question about spontaneous liabilities. On pg. 481, the spontaneous liabilities-to-sales ratio summarizes that this will reduce
While trying to understand the equation, I had a question about spontaneous liabilities. On pg. 481, the spontaneous liabilities-to-sales ratio summarizes that this will reduce the need for external financing, for example, by paying suppliers in 20 days rather than 10 days. How does changing paying a supplier 10 days later play a part in allowing a company to forecast its sales?
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