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arizzaman5 Factors Affecting Investment in Receivables the Size of Eowing are some of the factors that directly or indirectly affect the size of the receivables: 1) Size of Credit Sales: The major factor affecting the size of the receivable is the volume of the credit sales. Receivables have a direct relation to the credit sales. As … Read more
Types of Risks Associated with Receivables. The risk related to receivables are: 1) Supplier Fraud Risk: The supplier fraud risk is the risk which the supplier may present the fake or duplicated pay order or invoice to the lender for financing. 2) Receivable Title Risk: The risk which the supplier has previously allocated or guarantee … Read more
Types of Inventories. Inventory denotes “stock of goods”. Various authors have defined this word in their own way. In terms of accounting, the word may be used to refer to the stock of finished goods only, while in a manufacturing concern this may include work in process, stores, raw materials, etc. The following are the … Read more
Inventory’s meaning and nature. Inventory denotes “stock of goods”. Various authors have defined this word in their own way. In terms of accounting, the word may be used to refer to the stock of finished goods only, while in a manufacturing concern this may include work in process, stores, raw materials, etc. International Accounting Standard … Read more
Inventory Management Techniques There are several inventory control techniques available, and which technique is used is determined by the nature and ease of the organization. An ideal inventory control technique, however, should cover all items and all stages of inventory control, starting from the stage when the material is received from the supplier until it … Read more
Classification of Working Capital. Working capital may be classified in two ways, viz., on the basis of “concept” or on the basis of “time,” both of which are discussed below: 1) On the Basis of Concept: On a conceptual basis, working capital is classified as ‘Gross Working Capital’ and ‘Net Working Capital. For the department … Read more
Operating leverage is related to the cost structure of a firm. It uses fixed costs incurred by the firm to maximize the returns. A cost is considered fixed when it remains the same even with a change in the output. In short, fixed costs are not affected by the change in production volume. Operating leverage … Read more
Bank borrowing is one of the important sources of finance for companies in the need of funds and working capital requirements. Bank borrowing, as a source of short-term finance, ranks just next to Trade Finance’, which is the most popular mode of short-term finance in India. The amount approved by a bank for a company’s … Read more
Objectives of Inventory Management. The following are the main objectives of inventory management: 1) Operational Objectives: These objectives include material and other parts which are available in sufficient quantity: i) Availability of Material: The main objective of inventory management is to ensure that a firm has the availability of various goods, as and when required. … Read more
Costs Associated with Inventory. Following are the four major costs associated with inventory: 1) Purchasing Cost: This is the normal cost of inventory. It includes the purchase price of the product bought from outside and the production costs in case of the goods are produced in-house. This inventory may be valued in a variety of … Read more