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 when one firm trade accounts receivable (AR) to another.  The purchasing firm is called as a factor.  The factor makes a profit by buying the AR at a discount.  Its risk is that few of the AR may default.  The selling firm obtains the cash it needs.

 

 


Related Discussions:- How does accounts receivable factoring work

What is risk adjusted discount rate, Q. What is risk adjusted discount rate...

Q. What is risk adjusted discount rate? The risk adjusted discount rate includes two rates viz (i) Risk-free rate: - Risk free rate is the usual rate or the usual discount r

Part 1: Contingency plan, Create contingency plans for the following scenar...

Create contingency plans for the following scenarios: • One of your highly qualified consultants has given three months notice and is planning to move to a competitor after this ti

What is debentures, Q. What is Debentures? Debentures a debenture is an...

Q. What is Debentures? Debentures a debenture is an instrument issued by the company acknowledge its debts to its holders . it is also an important method of raising long terms

Standard deviation, Standard Deviation An investment must be evaluated ...

Standard Deviation An investment must be evaluated on two dimensions - rate of return and risk. An investor cannot enjoy a high return without any exposure to risk.  The higher

Analysis of financial plans, Part 1: Contingency plan Create contingency pl...

Part 1: Contingency plan Create contingency plans for the following scenarios: > One of your highly qualified consultants has given three months notice and is planning to move to a

Determine the concept of cash flow to shareholders, Does financial leverage...

Does financial leverage (debt) have any impact on the Free Cash Flow, on the Cash Flow to Shareholders, on the growth of the company and on the value of the shares? Debt has no

Financial Analysis of Carrefour & Tesco Supermarkets, comparative analysis ...

comparative analysis on these two food retailing giants

Find the expected dividend - stocks, You are considering the purchase of so...

You are considering the purchase of some shares of PECO Inc. common stock which paid a dividend of $1.50 today. You expect the dividend to grow at the rate of 7% per year for the n

Define where security returns are found less correlated, Security returns a...

Security returns are found to be less correlated across countries than within a country. Why can this be? Answer:  Security returns are less correlated possibly because countries

Problem in the determine of cost of the capital, Q. Problem in the determin...

Q. Problem in the determine of cost of the capital? Conceptual controversies regarding the relationship between the cost of the capital and the capital structure: different the

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