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

Managing finance, Read the journal article Lafferty, B. A., & Hult, G. T. M...

Read the journal article Lafferty, B. A., & Hult, G. T. M. (2001) ‘A synthesis of contemporary market orientation perspectives’, European Journal of Marketing, 35 (1/2), pp. 92–109

Long currency straddle, If the future spot rate of euro at option expiratio...

If the future spot rate of euro at option expiration is uncertain and takes a value within a range of $0.95 to $1.10, construct a contingency graph for a long currency straddle and

Compute full cost-financially-based rationale , Bill Nicholson wants you to...

Bill Nicholson wants you to help him prepare the financial case for moving the manufacturing operation to Andover.   He has specifically expressed interest in getting answers to th

Option based valuation approach, When an investor purchases non-calla...

When an investor purchases non-callable or non-putable convertible bonds, he would be buying a non-callable/non-putable straight security and also buying a call o

Compare and contrast mutual and stockholder, Compare and contrast mutual an...

Compare and contrast mutual and stockholder-owned savings and loan associations. A few savings and loan associations are owned by stockholders, just like commercial banks and ot

Explain the post-acquisition integration plan, Explain the Post-acquisition...

Explain the Post-acquisition integration plan Post-acquisition integration plan Keep  all  channels  of communications open,  by  includin

Internal rate of return (irr), Internal Rate of Return (IRR) : This rat...

Internal Rate of Return (IRR) : This rate attempts to find the earnings rate, which equates the current value of the streams of earnings to the investment outlay. IRR is descri

Rating scale, Rating denote an issuer's ability to respond to adverse...

Rating denote an issuer's ability to respond to adverse changes in circumstances and economic conditions. The rating scale is generally differentiated into variou

Determine about the shareholders, Determine about the Shareholders Shar...

Determine about the Shareholders Shareholders, being the owners of the company, elect board of directors and vote on major issues that affect functioning and long term plans of

Credit risk, A bond investor is always exposed to credit risk. Credit...

A bond investor is always exposed to credit risk. Credit risks can be classified into three types. They are: Default Risk Credit Spread Risk

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