Show the motives of maintaining receivables, Financial Management

Assignment Help:

Q. Show the Motives of Maintaining Receivables?

Motives of Maintaining Receivables :-

(i) Sales Growth Motives: - The major objectives of credit sales are to increase the total sales of the business. On being specified the facility of credit customers have shortage of cash may as well purchase the goods. Consequently the prime motive for investment in receivables is sales growth.

(ii) Increased profit Motive: - Because of credit sales the total sales of business increases. Therefore in turn results in increase in profits of the business.

(iii) Meeting Competition Motive: - In business merchandise are sold on credit to protect the current sales against emerging competition. If goods aren't sold on credit the customers may shift to the competitor who allows credit facility to them.


Related Discussions:- Show the motives of maintaining receivables

Types of traders in future and option markets, Types of Traders in Future a...

Types of Traders in Future and Option Markets: Hedgers Hedgers use the futures and options market principally for risk management purposes because of their exposure to pri

Gordon`s dividend capitalisation model , Considering the following informat...

Considering the following information, what is the price of the share as per Gordon’s Model? Details of the Company Net sales Rs.120 lakhs Net profit margin 12.5% Outstandin

Calculate the risk premium and probabilities , Johnson & Johnson (JNJ) is t...

Johnson & Johnson (JNJ) is trading at 68.15 (Sep 12th 2012 close). JNJ is a large health care conglomerate. It has done well so far this year (though not as well as the market) and

Operating cycle, applicability of an operating cycle in a vegetable growing...

applicability of an operating cycle in a vegetable growing business

Investment decision and financing decision, The Investment Decision: - Inv...

The Investment Decision: - Investment decision as well known as 'Capital Budgeting' is related to the selection of long-term assets or else projects in which investments will be m

Show the disadvantages of adjusted discount rate, Q. Show the Disadvantages...

Q. Show the Disadvantages of adjusted discount rate? (1) The risk premium rates resolute under this method are arbitrary. Therefore this method mayn't give objective results.

Agency relationship, Solutions to shareholders and government agency proble...

Solutions to shareholders and government agency problemquestion #Minimum 100 words accepted#

What are the misstatements, Q. What are the misstatements? A Misstatem...

Q. What are the misstatements? A Misstatement is Inconsequential - If a reasonable person would determine after considering the possibility of further undetected misstatement

Why is the coefficient of variation a better risk measure, Why is the coeff...

Why is the coefficient of variation a better risk measure to use than the standard deviation when evaluating the risk of capital budgeting projects? The coefficient of variatio

Multicollinearity, Multicollinearity As the degree of correlation betwe...

Multicollinearity As the degree of correlation between the independent variables increases, the regression coefficients become less reliable. That is, although the independent

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