A company's investment in receivables is influenced by several variables, including:

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All of the above factors can influence a company's investment in receivables. The level of sales directly affects the number and value of receivables a company has outstanding. The nature of the product or service sold can affect the likelihood of customers paying on time or defaulting on their payments. Credit and collection policies, such as credit terms, interest rates, and collection methods, can also impact the amount of investment a company must make in receivables.

A Company's Investment in Receivables Is Influenced by Several Variables