Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FM Exams › Supply chain finance
- This topic has 3 replies, 2 voices, and was last updated 6 years ago by
John Moffat.
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- April 20, 2019 at 3:59 pm #513595
Good day sir,
I would like to ask:
1. Does supply chain finance considered as a source of finance and how does it differs from factoring?
2. What are the practical considerations and implications of using this source of finance?
3. How does supply chain finance will impact on the financial statements and financial ratio? Can quote me an example?
3. Does it falls under any category of finance either debt or equity?Thanks Sir
April 20, 2019 at 8:42 pm #513608It is not a sourcs of long-term finance – it is simply using a delay in paying liabilities against collecting receivables faster. It is neither debt nor equity but a way of minimising the working capital requirement.
Have you watched my free lectures on working capital and on sources of finance?
The lectures are a complete free course for Paper FM and cover everything needed to be able to pass the exam well.
April 21, 2019 at 3:07 am #513626ya I have watched all the lectures video.
how about does it considered as short term source of finance?
How does it differs from factoring?
can we use it to raise additional finance for working capital?just to hope understanding more
thankss u sirApril 21, 2019 at 10:32 am #513650It is nothing to do with factoring.
Essentially it is using payables to help finance receivables and as such is short term finance.
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