KIT digital says that it anticipates assuming a relatively small amount of short-term debt at closing, in order to finance ioko's accounts receivables, which the company expects to pay down quickly.
Yet, to reduce accounts receivable, Goodyear has forced distributors to pay up in 30 days instead of the customary 60.
The Ocwen Financial Corporation, which bought the unit, Saxon Mortgage Services, has also agreed to pay Morgan Stanley $1.4 billion for servicing outstanding receivables.
Instead of being paid for the receivables upfront, WorldCom will have to wait for those customers to pay their bills, which could take up to three months.
If Lucent violates these requirements its bankers could pull their loans and demand access to the company's receivables and inventory, putting pressure on the company's ability to pay for its day-to-day operations.
Revenue is usually recorded when a customer receives merchandise and either pays for it or promises to pay the company in the future (in which case the revenue is recorded in accounts receivable).
The company has securitized many of its receivables, selling them for less than their face value, to raise money to pay down debt.
And Xerox negotiated with its banks so that it had to pay out only $25 million to satisfy obligations for refinancing its accounts receivables, rather than the $315 million analysts had expected.
Soon after signing up for BodeTree, Mr. Ritz noticed that his invoicing policy — he typically gave customers up to 60 days to pay — placed him near the bottom of the pack in accounts receivable.
To measure a hospital's ability to pay its obligations (e.g., debt, payables) using its assets (e.g., cash, inventory, receivables), we construct two variables for asset liquidity.
Pavlo was stuck: He knew customers were taking in piles of cash yet refusing to pay their bills; he says his MCI bosses knew of the chicanery but refused to write off the receivable.
