Day: March 7, 2022

The evaluation of an applicant begins when he fills a form providing basic financial and credit data and references. Additional information will be obtained from other sources depending on time and expense and size of credit involved. The credit analyst Read More …

Account Receivables are amounts of money owed to a firm by customers who have bought goods and services on credit. Management of receivables aims at determining the optimal level of investment in receivables, which maximizes the benefits and minimizes the Read More …

The finance manager must be wary of two polar extremes in working capital management. These extremes are, over-capitalization and, over-trading. 1. Over Capitalization (Conservative Financing Strategy) If a company manages its working capital, so that there are excessive stocks, debtors Read More …

There are three types of inventory: • raw material • work-in-progress • Finished goods. These are 4 types of costs associated with inventory management: Holding (carrying) cost Ordering cost Purchase cost Stock out costs Holding Costs These include warehousing costs, Read More …

Current assets can either be financed by use of short-term on long-term finds. For every firm, there is a minimum level of net working capital that is permanent. The magnitude of current assets needed is not always the same. It Read More …

Optional investment in current assets i.e. liquidity management is important because current assets are non-earning assets. Current assets affect the firm’s financial risk. The consideration of the level of investment in current assets should avoid 2 danger point’s i.e. excessive Read More …