The number of days that, on average, suppliers finance a company. It is calculated by dividing the balance of the supplier account by the net sales figure, and multiplying it by 365 days. If the value-added is very high, sometimes the cost price sales figure is used, although it is not usual since it is preferable to compare it with the average collection and maturity period.
« Back to Glossary IndexAverage Payment Period (PMP)
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