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He also checks a company's "quick ratio," which compares cash and accounts receivable to current liabilities; again, bigger is better.
Mr. Smedley provided a copy of a letter he said was sent to clients of his Altria, which provides services like billing and accounts receivable to hospitals and medical practices.
Small hospitals, nursing homes and other health care providers sold their accounts receivable to the company, usually getting 80 or 90 cents on the dollar, rather than waiting for insurance payments.
SK Global said that the latest restatement of results came about because on the advice of auditors from Ernst & Young, it had reclassified some customer accounts from receivable to uncollectible and had written them off.
Georgia-Pacific recently installed a highly sophisticated software system that ties in all its operations, from orders to production to accounts receivable to human resources, and analysts expect it to add Fort James's operations to the system as soon as possible.
In another move to raise cash, Bally has sold $105 million in accounts receivable to financial institutions since March.
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They hold credit balances with CIT after selling their receivables to the firm but receiving only a portion of the payment upfront.
C1 Sears Sells Credit Business Sears agreed to sell its $29 billion portfolio of credit card receivables to Citigroup for about $3 billion in cash.
Endless days spent chasing receivables to meet his firm's swelling payroll drove him to the brink.
The deal raises Citigroup's total managed card receivables to nearly $169 billion; MBNA, the next largest, has a $107 billion portfolio.
Armstrong said it was evaluating options ranging from selling assets and businesses to obtaining secured financing and selling receivables to raise cash to meet the obligations.
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