Hello, Guest   |   Login here

Case 6: Supplier's Credits

The firm must always have sufficient cash to pay for its operating expenses. Thus the policy of the firm for minimum cash is to have enough cash in any given month to pay for next month expenses.

Among the actions that management can take to ensure the solvency of the firm are measures to source short term funds from Suppliers, particularly when there are periods in which the cash flows show that there will not be sufficient cash to cover running expenses.

So, investors want to know what action management can take in relation to obtaining Supplier’s Credits, when and in which amount, to always have the necessary cash to pay for operating expenses. Thus, management has been asked by the Board to come up with a plan to obtain and negotiate Supplier’s Credits at the right opportunity and in advance of the month when there will be a cash deficit.

To carry out a simulation on Supplier’s Credit to find out the most advantageous time to obtain such credit, by which amount and when to pay it back proceed as follows

Subscribe today and learn the fundamentals

Hello,
It seems you don't have access to the exclusive content of The Course.

In order to gain access to the content of The Course you will have to register with EntreprenAble. Membership with EntreprenAble will also give you access to our interactive Business Game and Accounting Simulations.

Subscribe today and get:

  • Unlimited website access to The Course
  • Optimized view for Desktop, Tablet and Mobile devices
  • Free 7-day, no obligation trial - normally £15
Start free trial
Test-drive the system for free