Unraveling Financial Interactions with Suppliers

Lecture Notes Title: “Unraveling Financial Interactions with Suppliers" 1. Supplier Credits: Financing Advance Payments • Definition: Supplier credits arise when a company purchases goods or services with advance payment, temporarily financing the suppliers during the time between payment and the arrival of goods or service delivery. • Purchasing with Advance Payment: • Results in a cash outflow (the amount paid in advance to the supplier). • The company temporarily finances its suppliers during the period between advance payment and the arrival of goods or services. 2. Financing Credits: Supporting Business Activities • Financial Implications of Advance Payments: • Advance payments to suppliers can serve as a form of financing for the company's investments. 3. Investments and Disinvestments • Investment Definition: Investment occurs when resources are utilized for: • Acquiring productive assets (e.g., equipment, machinery, goods, services, etc.). • • Providing financing to third parties. Investment Operations: Investment operations involve both the inflow of assets, acquisition of services or goods, and the increase in credits, as well as the outflow of monetary resources or the emergence of operational debts. 4. Purchasing Goods or Services with Deferred Payment • Operation Outcome: This operation simultaneously leads to an increase in financing and an increase in investments. • Components: • Inflow of goods or services from suppliers. • Increase in operating debts.