business finance definitions

2. Hassan Shahid
Roll # 22

3. Current Liabilities Management
Review Accounts payable the key components of credit terms and the procedure for analyzing those
term
Describes the various ways in which inventory be used as short term loans collateral

4. Current Liabilities Management
 Role in cash conversion cycle
 Analyzing credit terms
 Effect of stretching Account payable
 Accruals

5. Current Liabilities Management
 Role in cash conversion cycle
The management by the firm of the time that elapses between its purchase of raw
material and its mailing payment to the supplier, this activity is Account Payable
Management.
 Analyzing credit terms
The credit terms that a firm is offered by its suppliers enable it to delay payments for
its purchases. Because the suppliers cost of having its money tied up In merchandise
after it is sold is probably reflected in the purchases price.

6. Current Liabilities Management
 Effect of stretching Account payable
A strategy that is often employed by a firm is stretching account payable that is
paying bills as late as possible without damaging its credit rating. Such a strategy can
reduce the cost of giving up a cash discount.
 Accruals
Liabilities for services received for which payment as yet to be made.

7. UNSECURED SOURCES OF SHORT TERM
LOANS
 Bank loan
 Line of credit
 Revolving credit agreement
 Commercial paper
 International loans
 Letter of credit

8. SECURED SOURCES OF SHORT TERM LOANS
Short term financing (loans) that has specific
assets pledge as collateral

9. The use of inventory as Collateral
 Floating Inventory Liens
 Trust Receipt Inventory Loans
 Warehouse Receipt Loans