Utilizing the Time Discrepancy between Receipts and Cash Payments as a Financing Source for Companies

Application on Baghdad Company for Soft Drinks for the Years 2014-2016

Abstract

The process of obtaining the necessary financing is the main concern of companies in order to ensure their survival and continuity in their work. There are many sources of financing that can be used by companies. The efficiency of the company's management is measured by the optimum utilization of the available sources. The cash flows resulting from the liquidation of temporary investments Inventory and accounts receivable and other current assets is a source of funding, especially if the management of the company followed a number of procedures that lead to raising the efficiency of cash management, including the preparation of the estimated future cash flows in the future And the acceleration of collection of receivables and the slow payment of liabilities, which causes time discrepancies between cash inflows to the company early and cash outflows from the company late, and helps the time variance of the company to exploit for its benefit as a free source of finance contributes to maximize the profitability of shareholders rather than resort to Other sources of financing that carry the company additional costs, which reduces the profitability, and in order to achieve this goal, the management of the company must balance between profitability and liquidity (cash), the best liquidity with the highest profitability and this is called the optimal exploitation of sources of funding.