Bank Loans, & Leasing Vs. Buying Most Essay

PAGES
2
WORDS
580
Cite
Related Topics:

¶ … Bank Loans, & Leasing vs. Buying Most companies acquire their inventory on credit which results into accounts payable and sell their products on credit which results into accounts receivables where in both cases there is no involvement of cash. Cash Conversion Cycle (CCC) therefore is a matrix that determines the length of time in days taken by a company to sell its inventory, and the duration of time taken to collect receivables and the duration of time taken by a company to pay its bills.

Cash Conversion Cycle is calculated as the Average Inventory Collection Period + Average Receivables Processing Period -- Average Payables Period. For instance if company 'X' has an average Inventory Collection Period of 85 days, an Average Receivables Processing Period of 55 days and an Average Payables period of 70 days then CCC will be (85+55-70)days which will be 70 days.

...

A longer period is unhealthy for companies and implies that cash is tied up and the company cannot undertake some of its core operations due to cash flow problems.
A company can shorten the cash Conversion Cycle by decreasing Inventory Days on Hand by increasing efficiency in its manufacturing process or decrease Average Collection Period by providing incentives to those who pay on time or sooner by giving small discounts to attract earlier payments or device a more reliable collection method or the company can as well increase the Days Payable Outstanding by holding onto the suppliers' payments. All these measures will increase the available cash at hand for…

Cite this Document:

"Bank Loans & Leasing Vs Buying Most" (2012, April 26) Retrieved April 20, 2024, from
https://www.paperdue.com/essay/bank-loans-amp-leasing-vs-buying-most-79575

"Bank Loans & Leasing Vs Buying Most" 26 April 2012. Web.20 April. 2024. <
https://www.paperdue.com/essay/bank-loans-amp-leasing-vs-buying-most-79575>

"Bank Loans & Leasing Vs Buying Most", 26 April 2012, Accessed.20 April. 2024,
https://www.paperdue.com/essay/bank-loans-amp-leasing-vs-buying-most-79575

Related Documents

Bank of America Leadership Overview of Corporation Bank of America Corporation, a multinational banking and financial services organization that is the second largest holding company in the entire United States by assets, and the fourth largest bank by capitalization. Headquartered in Charlotte, North Carolina, the banks serves clients in more than 150 countries and has a business relationship with over 99% of U.S. Fortune 500 companies and 83% of the Fortune Global

Bank of America built its success by leveraging different elements of bank deregulation to grow the company into a national bank in the U.S., one of the country's largest. The driving force behind this success was visionary leadership at the top of the company and the ability to integrate a high growth platform with multiple acquisitions at the more functional managerial levels of the company. Thus, the company's leadership development

Loan Sales and Other Credit
PAGES 13 WORDS 3727

ETMA accomplishes its primary objective, improving risk management, efficiency and transparency of the secondary market, by surveying and legal requirements and developments. (Buckley, 1998, p. 47) Loan Sales FAQs What is a loan sale? A loan sale is a commonly used term for the sale of loans or loan pools. Loans acquired by the FDIC from failed financial institutions are generally sold in pools through sealed bid sale or English outcry auction. How

Loan Scenario Norwest Bank had been lending money to Tresch to run a dairy farm. The balance due the bank after several years was $147.000; the loan agreement stated that Tresch would not buy any new equipment in excess of $500 without the express consent of the bank. Some time later, Tresch applied to the bank for a loan of $3,100 to purchase some equipment. The bank refused to make the

Lesson Plan Amp; Reflection I didn't know what state you are in so was unable to do state/district standards! Lesson Plan Age/Grade Range; Developmental Level(s): 7-8/2nd Grade; Below grade level Anticipated Lesson Duration: 45 Minutes Lesson Foundations Pre-assessment (including cognitive and noncognitive measures): All students are reading below grade level (5-7 months) as measured by standardized assessments and teacher observation Curricular Focus, Theme, or Subject Area: Reading: Fluency, word recognition, and comprehension State/District Standards: Learning Objectives: Students will develop

Branding in Service Markets Amp Aim And Objectives Themes for AMP Characteristics Composing Branding Concept Branding Evolution S-D Logic and Service Markets Branding Challenges in Service Markets Considerations for Effective Service Branding Categories and Themes Branding Theory Evolution S-D Logic and Service Markets Branding Challenges in Service Markets Considerations for Effective Service Branding Branding Concept Characteristics Characteristics Composing Branding Concept Sampling of Studies Reviewed Evolution of Branding Theory Evolution of Marketing Service-Brand-Relationship-Value Triangle Brand Identity, Position & Image Just as marketing increasingly influences most aspects of the consumer's lives, brands