Define how does accounts receivable factoring work, Financial Management

Assignment Help:

How does accounts receivable factoring work?  What are the benefits to the two parties involved?  What are the risks?

Factoring is while one firm sells accounts receivable that is AR to another. The purchasing firm is known as a factor. The factor creates a profit by purchasing the AR or Accounts receivables at a discount.  Its risk is that some of the AR Accounts receivables may default. The selling firm gets the cash it needs.


Related Discussions:- Define how does accounts receivable factoring work

Show financial management process, Q. Show Financial Management Process? ...

Q. Show Financial Management Process? The financial management process begins with the financial planning and decisions. While implementing these decisions, the firm has to acq

What is emerging issues task force, Q. What is Emerging Issues Task Force? ...

Q. What is Emerging Issues Task Force? Emerging Issues Task Force (EITF) - Assists FINANCIAL ACCOUNTING STANDARDS BOARD (FASB) and provides guidance on early identification of

Explain significance of the additional funds needed (afn), Explain the sign...

Explain the significance of the term additional funds needed. While the pro forma balance sheet is completed, total assets and total liabilities and equity will hardly match.

Caselet, suggestion regarding credit limit. should it be approved or not wh...

suggestion regarding credit limit. should it be approved or not what should be the amount of credit limit that electronics give to booth plastics

Straight line depreciation, Alger Corp wants to buy some construction equip...

Alger Corp wants to buy some construction equipment for $50,000, which has a useful life of 4 years with no salvage value. Alger uses straight-line depreciation. Alger has a tax ra

Type of assets, type of assets for ppt from t.y.bom com student in commerce...

type of assets for ppt from t.y.bom com student in commerce department in financial management

Financial bootstrapping, Briefly describe the major differences between a s...

Briefly describe the major differences between a sole proprietorship and a corporation. Under which form would you choose for a business, and why? Describe the meaning of financi

Bse-500 and sectoral indices, BSE-500 and Sectoral Indices On August 9,...

BSE-500 and Sectoral Indices On August 9, 1999, another new index was introduced in the market which was based on the data of 500 companies and designated as BSE-500 index. It

Need for credit and its nature, Need for Credit and its nature On the d...

Need for Credit and its nature On the demand side of the economy are the consumers of goods and services who require funds basically for acquiring certain consumer durables. Th

Defqa, Ask question #Minimum 100 words acceptedaqs #

Ask question #Minimum 100 words acceptedaqs #

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

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!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd