The Disadvantage of Accounts Receivable Financing Is the Negative Impact

question 56

True/False

The disadvantage of accounts receivable financing is the negative impact on cash flow.

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Definitions:

Net Working Capital

A financial measure that illustrates the gap between the current resources of a business and its short-term obligations.

Shareholders' Equity

The residual interest in the assets of a corporation after deducting its liabilities.

Liquid Asset

An asset that can be quickly converted into cash with minimal impact to its value.

Liquid Assets

Assets that can be easily converted into cash with little impact on their value.