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    I need help! The question is EXPLAIN HOW DEPT FACTORING MIGHT BENEFIT A RETAILER THAT OFFERS LONG-TERM CREDIT TO ITS CUSTOMERS.
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    (Original post by galangqueeny25)
    I need help! The question is EXPLAIN HOW DEPT FACTORING MIGHT BENEFIT A RETAILER THAT OFFERS LONG-TERM CREDIT TO ITS CUSTOMERS.
    Improves cash flow and reduces net margins.So, by factoring the debt, the retailer has less cash ties up in creditors so has a stronger balance sheet.
    Reduction in margins make the retailer less profitable so weakens contribution to balance sheet.
    Much depends on how liquid the retailer is, ie, can it afford to have a increased level of creditors? What's the risk?
    Shout if you need more.
 
 
 
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Updated: February 27, 2018
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Are you going to a festival?

The Student Room, Get Revising and Marked by Teachers are trading names of The Student Room Group Ltd.

Register Number: 04666380 (England and Wales), VAT No. 806 8067 22 Registered Office: International House, Queens Road, Brighton, BN1 3XE

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