Advantages of overdraft finance, Finance Basics

Advantages of Overdraft Finance

1. It is useful in financial crisis such an accountant cannot forecast because of abrupt fall in profits so liquidity problems.

2. In some cases it may be safe on goodwill therefore creating it flexible finance.

3. It does not entail preconditions and is consequently investible in high-risk situations whenever the firm would not have finance in normal circumstances.

4. It is raised faster and as common is ideal to invest in critical ventures as an example of documentary investments and e.g. of shares housing bonds, treasury bonds and bills etc.

5. Whether not used for a long duration of time - it does not affect the company's gearing level and consequently does not relate to company's liquidation or receivership.

6. Less formalities/procedures included.

Posted Date: 1/29/2013 5:06:38 AM | Location : United States







Related Discussions:- Advantages of overdraft finance, Assignment Help, Ask Question on Advantages of overdraft finance, Get Answer, Expert's Help, Advantages of overdraft finance Discussions

Write discussion on Advantages of overdraft finance
Your posts are moderated
Related Questions
Earnings Method or Earning Basis Valuation By using the earning valuation method, a company will employ its P/E ratio to value its shares. P/E    =  MV/E MV    =   E x P

Advantages of Residual Theory 1. Saving on floatation costs No require to raise debt or equity capital as there is high retention of earnings that necessitates no floatat


Buying Shares of a Company Factors should be refer when Buying Shares of a Company 1. Economic situation of the country and other non-economic factors as like unfavorable c

Mr. de Ville, the owner of Tasman Ian de Ville Holdings Ltd. (TIDH) has asked you to evaluate five investment projects. TIDH has a $10,000,000 investment budget, an investment hurd

Investment Opportunity and Capital Structure Investment Opportunity Lack of suitable investment opportunities, that is so, by positive returns or N.P.V., may encourage a

Business Activity Cycle The interest rates also depend on business cycles as above. Because the economy moves in the four (4) business cycles, such interest rates will shift l

Marbela Corporation's stock had a required return of 12.75% last year, when the risk-free rate was 6.4% and the market risk premium was 5.5%.  Now suppose the market risk premium d

Matching Approach - Financing Current Assets This approach is further referred to as the hedging approach. Beneath this approach, the firm adopts a financial plan that involve

WHy does most interbank currency trading worldwide involve the US dollar?"