The impact of current borrowings and debts on the entity development
Journal Title: Relații Internaționale Plus - Year 2018, Vol 1, Issue 13
Abstract
In the process of economic and financial activity of any entity, there is the need to settle with buyers, suppliers, budget, staff, etc. Since the moment of payment of debts does not coincide, usually with the moment of their occurrence, the enterprise generates both receivables and debts. The size, composition, structure and rate of rotation of receivables and debts determine the enterprise’s needs in the working capital fund, a number of financial indicators and, ultimately, the enterprise’s profit. Since the enterprise can change the settlement method and the terms of the contracts, it is of utmost importance that the state of receivables and debts and their management are constantly monitored. The issue of the comparability of receivables and debts is necessary and timely. It serves as a basis for analyzing the liquidity of the balance sheet and the solvency of the entity, since it must pay off its debts irrespective of whether the borrowers have honored their payment commitments or not. Therefore, receivables and debts should be considered separately, namely: receivables - as temporary assets in the economic circuit, and debts - as means attracted in this circuit. In this context, the purpose of the research is to determine the impact of debt and short-term receivables on the development of the agricultural entity. The object of the research is the limited liability company “Fânaţ-Agro”, which has its headquarters in the village of Albineţul Vechi in Fălești region.
Authors and Affiliations
Elena NIREAN, Boris Corețchi
Keywords
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