Alcatel Case

Alcatel Case Section 1 One of the main aspects of the Alcatel Case has to do with a concept called accounts receivable. In this case it is also referred to as wad receivables, but can go by other names such as advances, customer deposits, or accounts gather upable. This is when there is coin owed by customers to a business in exchange for goods or services that have been delivered or used, but not notwithstanding paid for. These receivables usually come in the form of operational lines of acknowledgement. most(prenominal) accounts receivable are due within a relatively short time period, usually under 90 days depending on the industry. The quicker a caller collects these receivables, the better. Most companies operate by having a certain portion of their gross revenue to be on credit. These types of sales are usually make to certain or frequent clients who get invoiced on a regular basis. This allows the clients to avoid the hassle of physically making payments as all(prenominal) transaction occurs. On a public companys balance sheet, accounts receivable is often recorded as an summation because this represents a legal obligation for the customer to remit cash for its short-term debts.

In Alcatels case, the company would provide vendor financing and other favorable terms to attract its customers without considering their customers credit worthiness. In turn, that would also increase the difficulty for its staff to collect receivables. Alcatels balance sheet reports a balance for affair receivables and related accounts, net. This is net of the allowance for doubtful accounts (ADA) and the gross conduct receivables. By extending this credit, which became increasingly bad (ADA kept increasing each year), it then caused a domino effect that caused the company problems in other areas. The reason why Alcatel would provide credit age ignoring its customers credit worthiness was done strictly for the purposes of sales and grocery store share. They did this in order to keep some important customers and relate the... If you want to get a full essay, order it on our website: Orderessay

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