Accounts Receivable

Cash owed to the business from customers. Credit is extended by the owner to entice the sale of the product or service provided. Customers typically have 30 days to pay the amount due. Some customers are extended additional time to pay based on their history etc.

Accounts Receivable Turnover Ratio

Accounts Receivable Turnover Rate

One of the activity ratios in business is the receivables turnover ratio or rate.   This ratio measures the frequency of collecting the entire balance of accounts receivable during a standard accounting year.   The ideal turns rate is twelve with a higher value indicating an aggressive collection process.   A lower value is a warning about accounts receivable management.

Working Capital Management – Production and Sales Flow

Working Capital Management

There is no single management style to address the multitude of working capital cycles existing in the various business sectors and the underlying industries.  Taking raw resources and turning them into consumer goods has different time frames depending on the item produced.  In addition, the sales period varies from product to product.  Compare the production and sales cycle for an automobile to that of ice cream.

Business Dynamics of Hauling

Business Dynamics of Hauling

One of the industries in the transportation sector is materials hauling.  This is your dump truck industry.  All of us see these trucks out on the highway usually hauling gravel or dirt.  To profit well, efficiency is the primary business principle .  Lack of efficiency drives up fuel costs, loss of time in hauling; increased maintenance and repairs, and finally customer dissatisfaction.  This article is an introduction to this industry as a part of the transportation sector of our economy.

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