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The net trade cycle, also known as the cash conversion cycle, measures the time it takes for a company to convert its investments in inventory and accounts receivable into cash flows from sales. It encompasses the duration of inventory holding, the time taken to collect receivables, and the payment terms with suppliers. A shorter net trade cycle indicates a more efficient working capital management, as it reflects quicker cash recovery from sales. This metric is crucial for assessing a company's liquidity and operational efficiency.

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