Advantages of overdraft finance, Finance Basics

Assignment Help:

Advantages of Overdraft Finance

1. It is useful in financial crisis such an accountant cannot forecast because of abrupt fall in profits so liquidity problems.

2. In some cases it may be safe on goodwill therefore creating it flexible finance.

3. It does not entail preconditions and is consequently investible in high-risk situations whenever the firm would not have finance in normal circumstances.

4. It is raised faster and as common is ideal to invest in critical ventures as an example of documentary investments and e.g. of shares housing bonds, treasury bonds and bills etc.

5. Whether not used for a long duration of time - it does not affect the company's gearing level and consequently does not relate to company's liquidation or receivership.

6. Less formalities/procedures included.


Related Discussions:- Advantages of overdraft finance

WACC., The following is the existing capital structure of Company XYZ Ltd. ...

The following is the existing capital structure of Company XYZ Ltd. Ordinary shares at Shs.10 par 1,000,000 Retained 800,000 12% preference shares Shs.10 par 400,000 16% loan Shs.1

Calculate total number of ordinary shares, Calculate total number of ordina...

Calculate total number of ordinary shares Example Company XYZ Ltd has sold 10,000 ordinary shares of Shs.30 as partly called up plus 20,000 Shs.45 preference shares, tha

Evaluate the fair value of the stock, Lavista Ltd is a leading music entert...

Lavista Ltd is a leading music entertainment company in the country and the stocks of the company are actively traded in the stock exchange. For the year just ended few days back

Jobbers or speculators - stock market, Jobbers or Speculators - Stock Marke...

Jobbers or Speculators - Stock Market 1. This is a dealer who that trades in securities in his own right like a principal. 2. He can set prices and make active the market w

Traditional business of deposit taking and lending, Question 1: i) Disc...

Question 1: i) Discuss  the main risks facing a retail bank in its traditional business of deposit taking and lending? ii) How can a bank manage the risks related to credit

Determine the net present value and internal rate, Berick Ltd is a relative...

Berick Ltd is a relatively small engineering company that manages to compete effectively with larger companies by adapting to changing market requirements and specialising in innov

Trial and error method, Trial and Error Method a) Select any rate of i...

Trial and Error Method a) Select any rate of interest on random and employ it to compute NPV of cash inflows. b) If rate selected produces NPV lower than the cost, want a l

Central bank - banking institutions, Central Bank - Banking Institutions ...

Central Bank - Banking Institutions This is a bank which is entrusted along with the responsibility of keeping economic stability and financial soundness of a country.  Theref

Commercial banks - banking institutions, Commercial Banks - Banking Institu...

Commercial Banks - Banking Institutions These are financial institutions such accept deposits of money from the universal public, safeguard the deposits and create them availa

estimate the price of the bond, Stardusts has 1 debt issue outstanding.  T...

Stardusts has 1 debt issue outstanding.  The debt matures on August 15, 2017, and has a 6.25% coupon.  Coupons are paid semiannually.  The bond is priced to yield 1.61% compound se

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