factor

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Factor

A financial institution that buys a firm's accounts receivable and collects the accounts.

Factor

A third party that buys a firm's accounts receivable. If a firm is not confident in its ability to collect on its credit sales, it may sell the right to receive payment to the factor at a discount. The factor then assumes the credit risk associated with the accounts receivable. This provides the firm immediate access to working capital, which is important, especially if the firm has a cash flow problem. The price of factoring is determined by the creditworthiness of the firm's customer, not of the firm itself. It is also known as accounts receivable financing.

factor

A firm that purchases accounts receivable from another firm at a discount. The purchasing firm then attempts to collect the receivables.

factor

To sell accounts receivable to another party at a discount from face value. Thus, a firm in need of cash to pay down short-term debt may decide to factor its accounts receivable to another firm.

factor

  1. a firm that purchases TRADE DEBTS from client firms. See FACTORING.
  2. a firm that buys in bulk and performs a WHOLESALING function.
  3. an input (for example raw material, labour, capital) which is used to produce a good or provide a service.

factor

  1. 1a FACTOR INPUT that is used in production (see NATURAL RESOURCES, LABOUR, CAPITAL).
  2. a business that buys in bulk and performs a WHOLESALING function.
  3. a business that buys trade debts from client firms (at some agreed price below the nominal value of the debts) and then arranges to recover them for itself. See FACTOR MARKET, FACTORING.
References in periodicals archive ?
The most striking example is information, media, and telecommunications where the simple approximation leads to an estimate 64 per cent lower than the actual magnification factor.
Such an increase can have a substantial impact on the magnification factor, leading to significant differences between the Paasche (magnification factor of 0.
522 Components of Magnification Factor Ratio of Growth Factor Cost Share of of Primary Primary Inputs Inputs to in Total Input Growth Factor Costs 2011 of All Inputs Industry (4) (5) A Agriculture, 0.
5) In a Paasche index framework, the magnification factor is the share of primary inputs multiplied by the ratio of the growth factor of gross output growth to the growth factor of real value added growth.
6) For consistency with the terminology used in Diewert (2015), we will refer to the term as a magnification factor even though it scales down the value added-based TFP estimates in this article.
10) Since the share of primary inputs in total input costs is equal to the ratio of primary input costs to total input costs at time 0 and the second term is the ratio of the growth factors of primary inputs and total inputs, the magnification factor can also be interpreted as simply the real cost share of primary inputs in total input costs at time 1 (i.
so that the Paasche magnification factor can also be interpreted as simply the ratio of real value added to real gross output at time 0.
537 Services Components of Magnification Factor Cost Share Ratio of Growth Error of of Primary Factor of Primary Primary Inputs in Inputs to Growth Cost Share Total Input Factor of Approximation Costs 2011 All Inputs (%) Industry (4) (5) (6) = 100 *((4)/ A Agriculture, 0.
We explore these empirical questions by constructing magnification factors using industry level productivity data from Australia between 1994 and 2013 and then comparing these to each other and to approximations constructed using the formulae developed by Diewert (2015).
6) For ease of interpretation, the magnification factors which we calculate are the reciprocal of those presented by Diewert.
We apply approximations of the Laspeyres, Paasche, and Fisher magnification factors to Australian data at the industry level taken from the Australian Bureau of Statistics (ABS) Estimates of Industry Multifactor Productivity.
Note that this means that the magnification factors we construct under the Laspeyres and Paasche frameworks will be exactly the same as the ratio of gross output-based TFP and value added-based TFP by construction.