Businesses utilize debt financing facilities for several operational and investing activities. Repayment of debt financing is usually arranged on regular repayment terms. Some revolving credit facilities and redeemable debts need large one-off settlements. One of the many solutions for businesses struggling to pay off these loans is to use a Swingline loan facility. Definition A […]
Swingline Loans: Definition and How it Works! Read More »
Companies raise financing through two sources mainly, Equity and Debt. Some financing instruments have hybrid nature of equity and debt financing such as preferred stocks. Debt can be defined in several ways depending on the characteristics and nature of the financing. One way of defining debt is the redemption or repayment terms. Definition A Redeemable
What is a Redeemable Debt? Definition and How it Works! Read More »
Working capital is the measure of a company’s short-term financial health and liquidity. The term working capital also means the difference between the current assets and current liabilities of the company. Current assets are more liquid than fixed assets, so a higher working capital equates favorable liquidity for the company. What is Working Capital Cycle?
Working Capital Cycle: Definition and How to Calculate It! Read More »
Budgeting can be defined in several ways on a financial and non-financial basis. The simplest of the budgeting definition is to allocate resources and compare the results against the allocations. The traditional line-item budgeting focuses on cost items and reducing the cost per item basis. Modern budgeting requirements call for activity-based resource allocations. One of
What is Program Budgeting? Definition and Example Read More »
When comes to unequal-lived and mutually exclusively projects, the annualized net present value is used as a decision rule for the project investment appraisal or capital budgeting decision or techniques. This is one of the capital budgeting refinements that we commonly encounter and use for the investment appraisal. In this article, we cover in detail
Annualized Net Present Value (ANPV) Read More »
Real options in capital budgeting are one of the special forms for capital budgeting refinements. In a traditional procedure of the capital budgeting decisions without the real options, we simply apply any appropriate decision techniques; for instance, NPV or IRR and make the decision. Recently, the real options have emerged and it plays a vital
Real Options in Capital Budgeting Read More »
A letter of credit (LC) covers the default risk for the exporter. The issuer of LC acts as an intermediary and guarantees the payment in case its customer defaults. Under normal circumstances, the letter of credit facility is issued once and with specified terms. The bank verifies the creditworthiness of the applicant and issues a
Revolving Letter of Credit Read More »
A Letter of credit is a form of undertaking given by an issuing bank in favor of the beneficiary against the creditworthiness of the applicant. In the modern trading world, we commonly treat any letter of credit as irrevocable unless otherwise stated explicitly. An irrevocable letter of credit is a formal contract between the issuing
Irrevocable Letter of Credit Read More »
A bill of lading acts as a legal document between the shipper (consigner) and the carrier of the goods. It also works as insurance of goods receipt for the buyer (importer) before making the payment. A negotiable bill of lading is one form of such a legal contract that comes with the flexibility of transferable
How to Endorse a Negotiable Bill of Lading? Read More »
By definition, the term lading means arranging the transportation of goods on a carrier of any type. Hence the term Bill of Lading (B/L) would mean the documentary evidence of goods transported through any means of carriage. Bill of lading is used commonly in both domestic and international trade. Domestic examples of the B/L may
What is a Bill of Lading? Read More »
