In most situations this will be essential to grant credit to customers. It may be essential either due to competition or because of the custom of trade. Though, when we grant credit to customers this implies that we have to finance the cost of materials for the duration of that credit. Conversely, you are financing your customers' business to the extent of the credit granted. When the business is expanding, the volume of receivables will also expand. Please notice that the requirement for financing receivable is not to the full extent of the accounts receivables as sales. You are in reality financing only to the extent of cost of goods sold out of the receivables as sales in question.

Posted Date: 4/9/2013 1:35:58 AM | Location : United States

Ask an Expert

Related Discussions:- Receivables, Assignment Help, Ask Question on Receivables, Get Answer, Expert's Help, Receivables Discussions

Write discussion on Receivables
Your posts are moderated

Write your message here..

Related Questions

Mathematical derivation of eoq, Mathematical Derivation of EOQ Let cos... Mathematical Derivation of EOQ Let cost per order is represented via Co. it is the cost incurred every instance one order is placed. Let the economic quantity purchase ever

Prepare the material cost budget of products of a company, Prepare the Mate... Prepare the Material Cost Budget of products of a Company For a company along with many products, a periodic budget would be developed given as: Assume a firm has 3 products X

Change in working capital, Current assets 180.00   ... Current assets 180.00   232.00 Less: Current Liabilities 80.00   105.00 Working Capital

Assumptions of break even analysis, ASSUMPTIONS OF BREAK EVEN ANALYSIS ... ASSUMPTIONS OF BREAK EVEN ANALYSIS 1. Fixed costs for all time remain constant. 2. All costs are divided into fixed and variable costs. 3. Selling price will not alter de

process costing, how to calculate total costing in weighted average metho how to calculate total costing in weighted average method

Actual cost, actual cost actual cost

Calculation of deductions - wages department, Calculation of Deductions - W... Calculation of Deductions - Wages Department A range of deductions are complete from gross earnings when computing the net payment because of the employee, that deductions may

Show the profit volume charts, Q. Show the Profit volume charts? A vari... Q. Show the Profit volume charts? A variation of a break-even chart, representing graphically the relationship between profit &losses at different levels of sales volume achiev

Calculate the nominal interest rate, A 1- year Canadian bond with a face va... A 1- year Canadian bond with a face value of 5000 can be purchased at 4800. a) Calculate the nominal interest rate in Canada. b) if the Canadian dollar is expected to depreci

measure the idle time variance, PH plc operates a modern factory that chan... PH plc operates a modern factory that changes chemicals into fertilizer. Due to the the demand for  its product  is  seasonal,  the  company expects  that  there will be an average