Page 371 - F1 Integrated Workbook STUDENT 2018
P. 371
Shortt term finnance and investments
Shoort term finaance
Current liabilities should not be alloweed to increaase to a level where the cash pposition
and liquuidity of the companyy are at rissk. This requires careeful managgement of short
term finnance:
The maain sourcess of short tterm fundinng are as ffollows.
F Factoring/ Bannk overdraft FFinancing
invoice
Tradde payablees discountingg A Advantagess exports
Addvantagess AAdvantagess
Addvantagess Flexible &
Easyy to arrangge u unsecured UUsful whenn
Cost savingg sellling goods or
servces
Disaadvantagees Dissadvantages overseas
Suupply stopss Disaadvantagees E Expensive
E Expensive
Increeased pricees Reepayable oon Dissadvantagges
C Customer demand
p perception Complex.
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