Accounts Receivable (AR) performance affects the Cash Asset Ratio by influencing the liquidity position of a company. Efficient AR management, resulting in faster collections and reduced outstanding balances, can improve the Cash Asset Ratio by increasing the proportion of cash and cash equivalents relative to current liabilities. Conversely, poor AR performance, with prolonged collection times and higher levels of overdue invoices, may lower the Cash Asset Ratio, indicating potential liquidity challenges.
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Emagia is a leading provider of AI-powered Order-to-Cash (O2C) automation platform that modernizes finance operations for midsize to large global businesses. Many global businesses and shared service centers use Emagia’s Enterprise Receivables Management System to transform to digital world-class operations in credit, invoicing and payments, receivables, collections, deductions, cash application and cash forecasting. Emagia solutions improve their customers DSO, cash flow, credit risk, operational cost, compliance and profitability.
