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

Financial statement analysis , Case Study based on Financial Statement Anal...

Case Study based on Financial Statement Analysis of Hatsun Agro Private Limited 800x600 Normal 0 false false false EN-IN X-NONE X-NONE

Convertible bonds, The issuer offers bonds with an option to the investor t...

The issuer offers bonds with an option to the investor to convert these bonds into equity shares at a pre-fixed ratio. These can be fully convertible bonds or partly co

Opportunity worth today, Assume that you can receive $25,000 per year forev...

Assume that you can receive $25,000 per year forever and that your cost of money is 7%. What is this opportunity worth today?

Expalin depository institutions, Depository institutions Depository ins...

Depository institutions Depository institutions: intermediaries with a important proportion of their funds derived from customer deposits - include commercial banks - savings i

Cost of capital, The Nu-Nu Brothers Inc. (NNBI) has the following capital s...

The Nu-Nu Brothers Inc. (NNBI) has the following capital structure, which it considers to be optional: Debt 25% Preferred Stock 15% Common Equity 60% NNBI''''s expected net income

Illustrate the comparison between equity and debt, Illustrate the compariso...

Illustrate the comparison between equity and debt Equity and Debt: A Comparison 1. Equity shares don't carry any fixed charges on them. If company doesn't generate positiv

Discounted cash flow, Discounted Cash Flow A technique used to present...

Discounted Cash Flow A technique used to present a forecasted stream of future cash flows in conditions of its present value, or its value in today's dollars. Discounted cash

Example on compound value of the single flow, Q. Example on compound value ...

Q. Example on compound value of the single flow? Mr. X invests Rs. 1000 at 10% is compounded yearly for three years. Compute value after three years. FV = PV (1+i) n FV

Explain the various types of l/c, Question 1 Describe briefly the various ...

Question 1 Describe briefly the various terms of payment available to an exporter and importer. Explain any one method in detail Question 2 A documentary letter of credit is

Determine the circumstances is a warrant’s value high, Under what circumsta...

Under what circumstances is a warrant’s value high? Explain. A warrant’s value would be high while the stock prices, time to expiration, and/or expected stock price volatility a

Write Your Message!

Name

Email id

Message

Verfication Code

User Account

All Pages