ENT 500 Lecture Notes - Lecture 14: Accounts Receivable, Accounts Payable, Mortgage Loan

• School: Ryerson University
• Department: Entrepreneurship and Strategy
• Course: ENT 500
• Professor: Steven Tissenbaum

Document Summary

Chapter 14 financing requirements, pro forma financial statement, and sources of financing. 3 principle reasons businesses need cash: purchase assets like equipment and inventory, pay for other costs like payroll, advertising, taxes, etc, pre-start-up costs including r&d and expert advice. 2 advantages of leasing equipment: requires no up-front cash, freeing the firm"s cash for other purposes, provides a hedge against equipment obsolescence. Cons of leasing: monthly payments, expensive to get out of it. Mgmt. of current assets and current liabilities. Cash budget (cash flow forecast) planning document strictly concerned with the receipt and payment of dollars; inflow and outflow of cash. Percentage-of-sales method of forecasting using a percentage of the total sales. Types of financing: debt capital financing provided by a creditor; borrowed and must be repaid at some predetermined date. Current (short-term) debt accounts payable, accrued expenses, short-term notes (cash amounts borrowed from a bank or other lending source and must be repaid within a short period of time)