Stephen A. Ross,
Massachusetts Institute of Technology
Randolph W. Westerfield,
University of Southern California
Bradford D. Jordan,
University of Kentucky
Gordon S. Roberts,
York University
| Accounts Payable Period | The time between receipt of inventory and payment for it.
(See Refer to page 604)
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| Accounts Receivable Financing | A secured short-term loan that involves either the assignment or factoring of receivables.
(See Refer to page 623)
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| Accounts Receivable Period | The time between sale of inventory and collection of the receivable.
(See Refer to page 603)
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| Carrying Costs | Costs that rise with increases in the level of investment in current assets.
(See Refer to page 610)
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| Cash Budget | A forecast of cash receipts and disbursements for the next planning period.
(See Refer to page 616)
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| Cash Cycle | The time between cash disbursement and cash collection.
(See Refer to page 604)
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| Cash Flow Time Line | Graphical representation of the operating cycle and the cash cycle.
(See Refer to page 604)
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| Covenants | A promise by the firm, included in the debt contract, to perform certain acts. A restrictive covenant imposes constraints on the firm to protect the interests of the debtholder.
(See Refer to page 623)
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| Inventory Loan | A secured short-term loan to purchase inventory.
(See Refer to page 626)
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| Inventory Period | The time it takes to acquire and sell inventory.
(See Refer to page 603)
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| Letter of Credit | A written statement by a bank that money will be paid, provided conditions specified in the letter are met.
(See Refer to page 623)
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| Maturity Factoring | Short-term financing in which the factor purchases all of a firm's receivables and forwards the proceeds to the seller as soon as they are collected.
(See Refer to page 625)
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| Operating Cycle | The time period between the acquisition of inventory and when cash is collected from receivables.
(See Refer to page 603)
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| Operating Loan | Loan negotiated with banks, usually by small business, for day-to-day operations.
(See Refer to page 621)
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| Shortage Costs | Costs that fall with increases in the level of investment in current assets.
(See Refer to page 610)
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| Trust Receipt | An instrument acknowledging that the borrower holds certain goods in trust for the lender.
(See Refer to page 626)
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2002 McGraw-Hill Higher Education