--%>

Explain working of accounts receivable factoring

Explain working of accounts receivable factoring? And describe benefits to the two parties involved and risks?
Factoring is while one firm sells accounts receivable (AR) to another. The purchasing firm is termed as a factor. The factor earns profit through purchasing the AR at a discount. Its risk is that some the AR may default. The selling firm gets the cash it required.

   Related Questions in Finance Basics

  • Q : Label equilibrium price P-equilibrium

    Normal 0 false false

  • Q : Making capital structure decisions In a

    In a perfect capital market, what advice would you give a corporate financial manager on making capital structure decisions? Justify your advice. How and why would your advice change as real world capital market imperfections are introduced?

    Q : What is Financial Restructuring

    Financial Restructuring: It is the reorganizing of a business' liabilities and assets. The procedure is frequently related with corporate restructuring where an organization's on the whole structure and its processes are refurbished. Though companies

  • Q : Describe time value of money Describe

    Describe time value of money?The time value of money means that money you have in your hand today is worth more than money you expect to obtain in the future. Likewise, money you have to pay out today is a greater burden than the similar a

  • Q : Charted bank loan policy Normal 0 false

    Normal 0 false false

  • Q : Define Legislative Counsel Bureau

    Legislative Counsel Bureau: The staffs of attorneys who draft legislation (that is, bills) and proposed amendments, and analyze, review, and render beliefs on legal matters for legislative members.

  • Q : What are Governmental Cost Funds

    Governmental Cost Funds: For lawful basis accounting and budgeting aims, funds which derive revenue from the taxes, licenses, and fees.

  • Q : Illustrates new balance sheet Normal 0

    Normal 0 false false

  • Q : Describe significance of excess reserves

    Normal 0 false false

  • Q : Describe who owns a credit union

    Describe who owns a credit union? Credit unions are owned through their members. While credit union members put money in their credit union, they are not "depositing" the money technically.  In spite of, they are purchasing shares of the cr