FINS1612 Chapter Notes - Chapter 6: Bailment, Interest Rate Risk, Secondary Liability

• School: UNSW, UNSW Sydney
• Department: Finance
• Course: FINS1612
• Professor: Apro J Zein, Mr AB Balogh, Mr W Fan

Document Summary

Short term debt is a financing arrangement for a period of less than 1 year. Short term assets should be funded with short term liabilities (matching principle) . Suppliers provide goods and services to a purchaser with an arrangement for payment at a later date. 2/10, n/30 - 2% discount if payed within 10 days or full payment due in 30 days. Providers disadvantages - costs of discounts, increases in credit periods, collection & A major source of short term finance allowing a firm to place its cheque (operating) account into deficit (agreed limit). Operated on a fully fluctuating basis (bring to credit every now & again) to meet. Interest rates negotiated with a bank at a margin above an indicator rate (e. g. bbsw) reflecting credit risk. Financial performance, future cf"s, length of mismatch between. Providers advantages - establishment, monthly account service, unused over draft limit,