Explain the characteristics of line of credit

Assignment Help Financial Management

Reference no: EM131130791

A) Explain the characteristics of a line of credit. What is it about these loans that make them by far the most popular type of short-term credit?

B) When the economy is growing at a slow pace, it puts a damper on production and sales. This is due to the fact that many people are trying to build up their lives after the recession and do not spend as much as they would usually spend. When consumers spend less, businesses begin to suffer losses in profit. Working capital management ensures a company has enough cash flow to be able to pay their short-term debts and operating expenses. A slow-growing economy can diminish the importance of working capital management because interest rates are low, so monthly payments are low. It can also costs less to pay for operating costs, so a company does not have to maintain as much working capital. Even though the it is not needed as much, it is still important because without any working capital, the company would not be able to pay any debts or operating costs. The company will still need to have some working capital to keep running.

What are your thoughts, DO you agree or disagree? Elaborate and Explain

Reference no: EM131130791

Questions Cloud

Explain pathophysiology of diagnosis that you have selected : Describe the etiology of the diagnosis that you have selected. Describe the epidemiology of the diagnosis that you have selected. Explain the pathophysiology of the diagnosis that you have selected.

Why would neoclassical economists be critical : Why would neoclassical economists be critical?

Who is responsible for it security : Identify and interview someone who is responsible for IT security (e.g., compliance, privacy, risk, or quality) - identify a health care facility where you would consider working in the field of health care informatics.

Brief description of what type of information given scenario : A brief statement of the potential utility and scientific merit of the information to be gathered by applying each of the qualitative methods above to the given scenario.

Explain the characteristics of line of credit : Explain the characteristics of a line of credit. What is it about these loans that make them by far the most popular type of short-term credit? When the economy is growing at a slow pace, it puts a damper on production and sales. This is due to the f..

Calculate the rate of return for each year 2006 through 2009 : Calculate the rate of return for each year, 2006 through 2009, for Apple stock. Assume that each year's return is equally probable and calculate the average return over this time period.

Considering change in its capital structure : Beckman Engineering and Associates (BEA) is considering a change in its capital structure. BEA currently has $20 million in debt carrying a rate of 8%, and its stock price is $40 per share with 2 million shares outstanding. BEA is a zero-growth firm ..

Defined as the incremental profit divided by the investment : Schweser Satellites Inc. produces satellite earth stations that sell for $99,100.00 each. The firm's fixed costs, F, are $1.60 million, 65 earth stations are produced and sold each year, profits total $394,000.00; and the firm's assets (all equity fi..

Discuss how psychosocial stressors related to event interact : Select one (1) stressful event in your life. From the e-Activity, discuss how psychosocial stressors related to this event can interact with your behavioral risk factors and how this, in turn, can lead to chronic health problems.

User Account

All Pages