Tiêu đề SUMMARY ST-LT Financing.pdf ✅

ANNUALIZED EFFECTIVE INTEREST RATE BANK LOAN LINE OF CREDIT REVOLVING CREDIT Amt Received = Principal - Interest - Compensating Bal. - TC Interest Bearing XXX N/A XXX XXX Non-Int Bearing XXX XXX XXX XXX SHORT-TERM FINANCING SPONTANEOUS DEBT NEGOTIATED DEBT ACCOUNTS PAYABLE ACCRUALS DEFERRED INCOME ST BANK LOANS COMMERCIAL PAPERS INVENTORY FINANCING RECEIVABLE FINANCING secured liabilities Gross AP List Price - Discount Finance Charge Net AP True Price "Instead of paying interest from external borrowings just forgo the discount." Trade Credit (TC) = Disc NOT taken = Ave. Daily AP Bal. x Credit Period (CP) Free TC = Disc Taken = Ave. Daily AP Bal. x Disc. Period (DP) Costly TC = Excess AP Bal. = Ave. Daily AP Bal. x (CP-DP) based on NET AP External Borrowings More Beneficial IF: Interest Payment < Discount Loss Nominal Rate Annualized Opportunity Cost Annualized Opportunity Cost Discount Rate 1 - Disc. Rate x # of Days in a Yr CP - DP OR Annualized Discount Loss Costly Trade Credit Effective Annual Cost of Trade Credit Discount Rate 1 - Disc. Rate x # of Days in a Yr CP - DP = [(1+ Interest Rate)^Interest Period] - 1 Longer Disbursement = Lower Annualized Opportunity Cost TRADITIONAL BANK LOAN LINE OF CREDIT REVOLVING CREDIT AGREEMENT Lump sum loan provided upfront = If SIILENT Bank approves max. credit limit Formal/committed line of credit FINANCE CHARGES Interest Payment Transaction Cost (TC) Interest Income Commitment Fee XXX XXX (XXX) N/A XXX XXX (XXX) N/A XXX XXX (XXX) XXX if Silent = Both Principal and Interest in Installment 2 x # of Installments* x Finance Charges (1 + # of Installments) x Amt. Received ANNUALIZED EFFECTIVE INTEREST RATE Amt Received = Principal - Interest - Flotation Cost Interest Bearing USUALLY NOT APPLICABLE Non-Int Bearing XXX XXX XXX Finance Charge x # of Days in a Year Amt. Received # Days of Paper FINANCE CHARGES: Interest Payment XXX Flotation Cost XXX FLOATING LIEN TRUST RECEIPT WAREHOUSE RECEIPT General Claim Specific Invty Repayment tied with Sale Specific Invty in 3rd Party Warehouse ANNUALIZED EFFECTIVE INTEREST RATE Amt Received = Principal - Interest - Transaction Cost Interest Bearing XXX N/A XXX if silent Non-Int Bearing XXX XXX XXX FINANCE CHARGES: Interest Payment XXX Flotation Cost XXX Warehouse Cost XXX (for Warehouse Receipts) ANNUALIZED EFFECTIVE INTEREST RATE Amt Received = Principal - Interest - Transaction Cost Interest Bearing XXX N/A XXX Non-Int Bearing XXX XXX XXX if silent Finance Charge x # of Days in a Year Amt. Received Credit Period FINANCE CHARGES: Interest Payment XXX Flotation Cost XXX Savings (XXX) (for Factoring) PLEDGING FACTORING AR = Collateral AR = Sold INTERMEDIATE FINANCING Purchase Asset vs. Lease Asset Net Investment PV Lease Payments + PV of Operating CF + PV of Operating CF + PV of Final Disposal *after-tax if financed with debt = Implicit Interest Rate for COMPENSATING BALANCE, interest income only considers additional funds needed to satisfy requirement and NOT existing Maintaining Balance already in the bank account If ONLY Interest Expense and Compensating Balance are given, Effective Interest Rate can be: % of Interest 1 - % of Interest - % of Compensating Bal. *In a Year short-term promissory note issued by companis with high credit rating • ALWAYS ISSUED AT A DISCOUNT • DURATION OF 1-270 DAYS ONLY @jiacpa2025 -# - * & 20 - Il *