Already have an account? Get multiple benefits of using own account!
Login in your account..!
Remember me
Don't have an account? Create your account in less than a minutes,
Forgot password? how can I recover my password now!
Enter right registered email to receive password!
Dangers of over-reliance on trade credit
In effect for the reason that trade credit represents temporary borrowing from suppliers until invoices are paid it becomes an important method of financing the firm's investment in current assets. Firms perhaps tempted to view trade payables as a cheap source of finance especially as in the UK at least it is currently interest-free. Having a receivables' collection period smaller than the trade collection period may be taken as a sign of efficient working capital management.
Nevertheless trade credit is not free. First by impediment payment of accounts due the company may be passing up valuable discounts thus effectively increasing the cost of goods sold. Second extreme delay in the settlement of invoices can undermine the existence of the business in a number of ways. Existing suppliers perhaps unwilling to extend more credit until existing accounts are settled they may begin to attach a lower priority to future orders placed they may raise prices in the future or simply not supply at all. Additionally if the firm acquires a reputation among the business community as a bad payer its relationships with other suppliers may be soured.
ABATEMENT OF LEGACIES (a) If the assets, after the payment of debts, necessary expenses and specific legacies, are not sufficient to pay all the general legacies in full, the l
GOODWILL This is defined as “the difference between the value of a business as a whole and the fair value of its net separable assets”. Goodwill in practical sense is the advant
Natasha's income is $300 per month. She spends all of it on tickets to concerts and films. A concert ticket costs $15 and a fi lm ticket costs $10. Her marginal rate of substitutio
When well conceived and executed properly, a growth-through-acquisition strategy is an accepted method to grow a business. What went wrong at WorldCom? Is there a need to put in pl
Does a state have the authority to require a U.S.-based multinational corporation to compute its state taxable income on a worldwide combined reporting basis? What about a foreign-
In January 2013, Mitzu Co. pays $2,600,000 for a tract of land with two buildings on it. It plans to demolish Building I and build a new store in its place. Building 2 will be a co
Balance Sheet and Income Statement Commentary
What is the internal rate of return for a project that has a net investment of $76,000 and net cash flows of $20,507 per year for 7 years? What is the internal rate of return fo
Permanent accounts would not include a interest expense b wage payable c prepaid rent d unearned revenues
a. Find five comparables for Bank of America (BAC) b. Find the CEO of BAC and five comparable companies, For BAC and all firms, find: c. Market value, alpha and beta (pric
Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!
whatsapp: +91-977-207-8620
Phone: +91-977-207-8620
Email: [email protected]
All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd