Factoring and the Firm Value
FACTA UNIVERSITATIS Series: Economics and Organization, Vol. 5, No. 1, pp. 31-38, 2008
8 Pages Posted: 24 May 2011 Last revised: 18 May 2014
Date Written: May 17, 2014
The basic financial purpose of an enterprise is the maximization of its value. Operating cycle management should also contribute to realization of this fundamental aim. The enterprise value creation strategy is executed with a focus on risk and uncertainty. This paper presents the consequences for the firm that can result from changes in operating cycle and operating risk that are related to using factoring as instrument to short target operating cycle of the firm and advantages resulting in risk reduction caused by transferring it to factor.
Keywords: Corporate risk management, operating risk, factoring, operating cycle
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