Question

Which of the following best defines the process of factoring in working capital management?

Q: Answer-Which of the following best defines the process of factoring in working capital management?

Factoring is explicitly defined as a financial arrangement where a business outsources the management and collection of its accounts receivables or debtors to a specialized third-party entity known as a factor. This mechanism enables the client business to quickly convert its pending invoice values into immediate liquidity.

A The process of issuing short-term commercial papers to institutional investors

B The process of outsourcing the task of collection from receivables or debtors to a separate party

C The process of borrowing long-term funds against the mortgage of fixed immovable property

D The process of evaluating the creditworthiness of corporate borrowers using letter-based ratings

E The process of reconstructing bad loans through the Insolvency and Bankruptcy Code framework

Practice Next

More Financial Management Questions

Which of the following is not a parameter under the CRG (Credit Risk Grading) system?
All the following will be included in the company’s operating activities except:
Evaluate the following statements about Break-Even Analysis: I. The Break-Even Point (BEP) is the level of output or sales at which total revenue exactly ...
How can organizations actively demonstrate a commitment to ethical conduct?
Which of the following portfolios is strictly prohibited from being assigned to the CVO?
The cost of capital for a firm _______.
What is Gross Value Added (GVA)?
In respect of an Overdraft/Cash Credit (OD/CC), when is the advance treated as NPA?
Which of the below statement is not true:
What is the minimum net worth requirement for a merchant bank to register with SEBI?

Relevant for Exams:

Bank of India Credit Officer Scale 1
Bank of India (BOI) Credit officer

Hey! Ask a query

Which of the following best defines the process of factoring in working capital management?

Detailed Solution

More Financial Management Questions

Relevant for Exams:

Hey! Ask a query

Please Register/Login