A Finance Company Will Generally Purchase the Accounts Receivable or Lend

question 74

Multiple Choice

A finance company will generally purchase the accounts receivable or lend small businesses somewhere between ______ percent of the face value of the accounts receivable being factored.

• A) 40 and 60
• B) 45 and 70
• C) 55 and 80
• D) 70 and 90

---

Definitions:

Inventory Turnover Rate

A measure of how quickly a company sells and replaces its stock of goods within a certain period.

Balance Sheet

A report detailing a business's assets, debts, and owner's equity at a particular moment, offering a glimpse into its financial health.

Income Statement

A financial statement that shows a company's revenues and expenses, and profits or losses over a specific period of time.

Relationship of Net Income to Net Sales

A profitability metric that measures the percentage of net sales that ultimately becomes net income, indicating the efficiency of a company in generating profit from sales.