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

Real Estate Finance, 1. Consider the following cash flows and reversion: T...

1. Consider the following cash flows and reversion: There is an $80,000 cash outflow at time zero. BTCFs for years 1-4, respectively, are $10,000, $20,000, $20,000, and $25,000.

Capital structure theory, Capital structure theory: Use the following ...

Capital structure theory: Use the following information to answer the questions: Case I: Capital structure theory ( no tax ) Case II: Capital struct

Classification of working capital, Q. Classification of Working Capital? ...

Q. Classification of Working Capital? Classification of Working Capital: - Working Capital is able to be classified in two ways firstly on the basis of concept and secondly on

Accrual bond, It is a bond that does not give periodic interest payments. I...

It is a bond that does not give periodic interest payments. In spite of that, interest is added to the principal balance of the bond and is either paid at maturity or, at some poin

Different cost of capital with changed proportions, Different Cost of Capit...

Different Cost of Capital with Changed Proportions: It is quite possible that the specific costs of capital of different sources may be affected by the amount of funds' raised and

Financial communications, Financial Communications Also known as inves...

Financial Communications Also known as investor or shareholder relations, this corporate communication sub function moves against from the traditional handling of the finan

Assigenment, a choice is to be made between the two completing proposal wh...

a choice is to be made between the two completing proposal which require an equal investment of Rs.50000.00 and we are expected t gererate net cash flow as under. Year Project A

Define the types of shareholder, Tactics can be used by company to protect...

Tactics can be used by company to protect itself. Before the bid Types of Shareholder Having the right shareholders on board who can be

Determine the scope of financial management, Scope of Financial Management ...

Scope of Financial Management The approach to scope and functions of financial management is divided, forpurposes of exposition, into two broad categories: (a) Traditional A

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