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

De-leveraged floaters, A floater where the coupon rate is computed as...

A floater where the coupon rate is computed as a fraction of the reference rate plus a quoted margin, are known as a de-leveraged floater. The general formula for this

Calculate cost of equity, 1. Why do you think you are asked to perform valu...

1. Why do you think you are asked to perform valuation given an array of discount rates? a. Would it not be more accurate to utilize, for example, CAPM to calculate cost of equi

What is return oncapital employed - performance ratios, What is Performanc...

What is Performance ratios ROCE Return oncapital employed (ROCE)= (Profit before interest and tax (PBIT) / Capital employed) * 100% ROCE measures profitability and illu

Interest Rate Derivatives, Interest Rate Derivatives: India's first t...

Interest Rate Derivatives: India's first trading on interest rate derivatives began in the National Stock Exchange of India (NSE) in June 2003 with futures on 91-day treasury

Securities exchange act, Securities Exchange Act of 1934 With this Act,...

Securities Exchange Act of 1934 With this Act, the Congress created the Securities and Exchange Commission. The Act empowers the SEC with broad authority over all aspects of th

Explain about the primary and secondary markets, Explain about the primary ...

Explain about the primary and secondary markets. Primary and secondary markets: A primary market is a financial market wherein new matters of financial securities (both s

What is corporate social responsibility, (a) The term "financial reporting"...

(a) The term "financial reporting" incorporates not only financial statements, but also includes other means of communicating financial and non-financial information. Financial rep

Cash management and inventory management, I am facing some problems in my a...

I am facing some problems in my assignment of Cash Management and Inventory Management. Can anybody suggest me the proper explanation for it?

Calculate the compound return, a)  What two legal documents should the coup...

a)  What two legal documents should the couple ensure are up-to-date if they want a sound estate plan?  What would happen if either became incapacitated or died and didn't have any

Capital management., explain the concept of working capital management?

explain the concept of working capital management?

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