Already have an account? Get multiple benefits of using own account!
Login in your account..!
Remember me
Don't have an account? Create your account in less than a minutes,
Forgot password? how can I recover my password now!
Enter right registered email to receive password!
Q. Explain about Invoice discounting?
Invoice discounting is a technique which is able to be used to raise finance against receivables.
Invoice discounting works as follows: A company issues an invoice to a customer as well as sends a copy invoice to the discount company which then makes a payment against the invoice and takes responsibility for collecting the debt from the customer. The amount of the payment will differ but is very rarely 100% of the invoice value. The balance of money unpaid is paid across to the selling company when the discount company has received full payment for the customer.
The arrangement has the effect of permitting the selling company to collect its debts in early so reducing the working capital requirement of the business and improving the cash flow.
The price that is paid for the service is typically set at a fixed percentage monthly rate for example 1% of the value of invoices discounted. Although the process operates "with recourse", companies will frequently find that they are only able to discount the invoices of customers with high credit ratings who are therefore reliable receivables. This means that not all invoices are able to be funded and the risk of bad debts remains. The extent to which companies may find that using invoice discounting does improve the cash flow is thus dependent upon the credit profile of customers and their bad debt record. The discounting is mainly advantageous (in cash flow terms) for companies which are selling to customers with high credit ratings and a good payment record.
How can a price ceiling make consumers better off? Under what conditions might it make them worse off? If the supply curve is completely inelastic a price ceiling will raise c
Interest rate caps as well as collars are available on the over the counter (OTC) market or may be devised using market based interest rate options. They may be utilize to hedge cu
What remains of an organization revenue after all expenses and taxes have been paid.
Limitations of participation: 1. Technology and organization today are so complex that specialized work roles are required making it difficult for people to participate succes
a) The combined two-firm concentration ratio of Motorola (approximately 17.5%) and Nokia (35%) is around 52.5% of the market. b) Up to 2 marks for correct definition: Market sha
Rating denote an issuer's ability to respond to adverse changes in circumstances and economic conditions. The rating scale is generally differentiated into variou
Taxation In the US, every state has a different set of rules governing the taxation of Hedge Funds and the investors who put their money in them. In some countries, Hedge Funds
In a fixed-rate coupon bond, the change in the price can be attributed to the change in the market interest rates. This change is due to the difference in the pre
Market participants' measure the default risk of an issue on the basis of the credit ratings that the credit rating agencies assign to the issues. Once rating is
The Australian skiing industry operates out of a very narrow seasonal base-approximately three months in a good season. In a good year, providers of accommodation, ski hire and tow
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!
whatsapp: +91-977-207-8620
Phone: +91-977-207-8620
Email: [email protected]
All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd