Question: Explain how an operating line of credit can help a company's liquidity.

Explain how an operating line of credit can help a company's liquidity.

Step by Step Solution

★★★★★

3.34 Rating (160 Votes )

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock

An operating line of credit or credit facility is used by a b... View full answer

blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Document Format (1 attachment)

Word file Icon

1160-B-A-L(6562).docx

120 KBs Word File

Students Have Also Explored These Related Accounting Questions!

Q:

1. On March 1, 2022, Crane Company accepted a two-month, 10%, $9,000 note from Bulldozer, Inc.. in settlement of its open account. The note is due April 30, 2022. Crane appropriately accrued the...

Q:

Buhler Industries Inc.'s financial statements contain the following selected data (in thousands): ______________________________ 2012 ___________________ 2011 Total assets...

Q:

1. Which of the following statements about debt is incorrect? a. Interest payments and principal payments are fixed commitments. b. Interest payments are not tax deductible. c. Bond holders are paid...

Q:

You, CA, are employed at Beaulieu & Beauregard, Chartered Accountants. On November 20, 20X5, Domenic Jones, a partner in your firm, sent you the following email: Our firm has been reappointed...

Q:

(LO 3) Explain how an operating line of credit can help a companys liquidity and why it is considered more flexible than most other bank loans such as mortgages.

Q:

Explain how an operating line of credit can help a companys liquidity and why it is considered more flexible than most other bank loans such as mortgages.

Q:

Financial Accounting: Please answer all questions. Please do in EXCEL where appropriate. Thank you very much. Part I. The owner of Alpine Golf Course Ltd., a local golf course, has just approached a...

Q:

(LO 2) (a) Why would a company use an operating line of credit? (b) Explain why an operating line of credit is recorded as bank indebtedness rather than a bank loan payable.

Q:

Part II. The following transactions are for Iqaluit Ltd., which has an April 30 year end. Instructions a. Identify which of the above transactions give rise to amounts that should be reported in the...

Q:

Part II. The following transactions are for Iqaluit Ltd., which has an April 30 year end. 1. In late April, Iqaluit received $12,000 in advance (on deposit) from a customer for inventory that the...

Q:

1 What is the starting point when conducting a financial analysis of the performance of a company? Review Later Review of company financial statements Ratio analysis Industry benchmarking Trend...

Q:

Consider carefully the following quotation: [E] conomists seem always to talk about the cost of medical care, as if that kind of spending were a bad thing. After all, where does the money go? To...

Q:

Reconsider the T-bill of problem 3. Calculate its bond equivalent yield and effective annual yield on the basis of the ask price. Confirm that these yields exceed the discount yield.

Q:

Write the equations in cylindrical coordinates. ( a ) 2 x 2 7 x + 2 y 2 + z 2 = 9 ( b ) z = 7 x 2 7 y 2

Q:

The Clarkson Company produces engine parts for car manufacturers. A new accountant intern at Clarkson has accidentally deleted the calculations on the companys variance analysis calculations for the...

Q:

An investor must choose between two bonds: Bond A pays $72 annual interest and has a market value of $925. It has 10 years to maturity. Bond B pays $62 annual interest and has a market value of $910....

Q:

Patricia's Quilt Shoppe sells homemade Amish quilts. Patricia buys the quilts from local Amish artisans for $230 each, and her shop sells them for $380 each. Patricia also pays a sales commission of...

Q:

Harold Reese must choose between two bonds: Bond X pays $95 annual interest and has a market value of $900. It has 10 years to maturity. Bond Z pays $95 annual interest and has a market value of...

Q:

The Glades Corporation has located a building that it would like to have for its new warehouse. The corporation has contacted the owner about making a trade for its existing property. The owner of...

Q:

32. Taxes that the federal government imposes on particular products are called: a) excise taxes. b) import taxes. c) export taxes. d) quotas. e) embargoes.

Q:

The September 1, 2009, edition of CFO.com contains an article by Marie Leone and Tim Reason entitled Dirty Secrets. You can access this article at www.cfo.com/article.cfm/ 14292477?f=singlepage....

Q:

The September 1, 2009, edition of CFO.com contains an article by Marie Leone and Tim Reason entitled Dirty Secrets. You can access this article at www.cfo.com/article.cfm/ 14292477?f=singlepage....

Q:

Hechinger Co. and Home Depot are two home improvement retailers. Compared to Hechinger, founded in the early 1900s, Home Depot is a relative newcomer. But, in recent years, while Home Depot was...

Q:

in Problem #7: One year ago, a U.S. investor converted dollars to yen and purchased 100 shares of stock a Japanese company at a price of 3,150 yen per share. The stock's total purchase cost was...

Q:

Six movies based on Marvel comic book characters for the U.S. box office as of fall 2017 are shown in the accompanying?table, with domestic gross rounded to the nearest million. Complete parts?(a)...

Q:

Blooper Industries must replace its magnoosium purification system. Quick & Dirty Systems sells a relatively cheap purification system for $12 million. The system will last 3 years. Do-It-Right sells...