Investing Surplus Cash

Participants in the Indian Money Market.

Investing Surplus Cash. Surplus cash that is not required in the short run should be invested in liquid assets, Le.. marketable securities, or other securities that can be instantly converted into cash when required. Cash itself is an unproductive asset, and keeping it in the same form will not benefit the firm. Rather, it has … Read more

Controlling Cash Outflows

Participants in the Indian Money Market.

Controlling cash outflows. Just as the basic rule for increasing cash inflows is to increase collection speed, the basic rule for decreasing cash outflows is to slow down the payment process. For this, a centralized payment system may be adopted, just as a decentralized collection system was adopted in the case of receivables. A reasonable … Read more

Factors Affecting Investment in Receivables

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

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

Types of inventories

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's meaning and nature

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

inventory management technique

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

Types/Classification of Working Capital

inventory management technique

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

Participants in the Indian Money Market.

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 Finance

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