What is Dilution?
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 know the extent to which your receivables are likely to be turned into cash receipts. The greater the amount of dilution, the greater the risk to the bank and the less will be your available borrowing base.
The following are common causes of dilution and suggestions for remedying them.
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OTHER TERMS BEGINNING WITH "D"
- Days Sales Outstanding (DSO)
- Debt Advisor (U.S)
- Debt Consolidation
- Debt Covenant
- Debt Equity Ratio (D/E ratio)
- Debt Financing
- Debt Service Coverage Ratio (DSCR)
- Debt to Assets Ratio
- Debt to Income Ratio (DTI)
- Debt Yield
- Debt-to-Income (DTI) Ratio
- Debtor
- Debtor Finance
- Debtor Report
- Debtor-in-Possession (DIP)
- Debtor-in-Possession Financing
- Deductions
- Deed of Company Arrangement (DOCA)
- Demand Line of Credit
- Deposit Account Control Agreement (DACA)
- Depreciation
- Depreciation & Amortization
- Dilution of Receivables
- Dilutive Financing
- Directional Boring Financing
- Discount
- Distress Cost
- Divestment
- Documentation Fee
- Double Brokering
- Dry Van
- Due Diligence
- Dynamic Discounting