Zombie Firm

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Zombie firms are businesses that are able to continue operating despite being insolvent or unprofitable, often relying on external support, such as loans or subsidies, to sustain their operations. These firms should…

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Liquidity

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Liquidity denotes the ability or swiftness with which an asset or security can be turned into cash without altering its market value. The epitome of liquidity is cash itself. As a result,…

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Debtor

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A debtor is an entity or person with outstanding debts. When the debt arises from a loan from a financial establishment, the debtor is termed a borrower. If the debt…

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Factor

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A factor is an intermediary that offers companies immediate cash or financing by buying their accounts receivables. Essentially, a factor is a financial entity that agrees to provide the company…

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Dilution

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Dilution is any portion, regardless of why, of your receivables that you did not collect. This is important as the amount available from your line of credit with the bank is based on your outstanding accounts receivable balance. The bank wants to…

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Call Loan

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A call loan is a type of loan that can be demanded for repayment by the lender at any given time. The purpose of a call loan is to minimize…

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Interest Coverage Ratio

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The interest coverage ratio is a financial metric that assesses a company’s ability to meet its interest obligations on its outstanding debt. It provides insight into the company’s ability to…

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