Turn tax dollars into working capital: unwrapping the wrapped lease

Article Abstract:

Corporate financial officers resort to a variety of tactics in their search for working capital. Some of these include asset-based loans, outright sale of accounts receivable, reporting negative cash worth on financial statements, and assorted tax-advantaged investment or employment programs. The newest technique is called wrap-around or leveraged leasing, which utilizes tax law to create working capital from estimated quarterly tax payments. Wrap-around leasing works and is legal, but there are several players and a few risks involved. Possible benefits include: increased cash flow; shareholder equity and earnings; improved short-term liquidity ratios and after-tax net income; reduced need to draw down lines of credit or issue additional stock; and more working capital. Wrap-around leasing cannot be used by 'S' type corporations.

Contracts, Taxation, Working capital

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EDI networks let you test the water before taking the plunge

Article Abstract:

Electronic data interchange (EDI) is like electronic mail, except that electronic mail exchanges messages and EDI exchanges financial data such as purchase orders, invoices, and payments between organizations. EDI can simultaneously automate a purchasing department, saving paperwork and money, as well as provide the corporate treasury or accounting department with information about cash flow. Many companies in the automobile and pharmaceuticals industry have already converted to EDI. Alternative routes to EDI include developing an internal EDI system compatible with supplier or customer systems; or setting up an EDI system through an EDI network vendor, which coordinates the effort between EDI users. Security is a major issue in setting up such systems, to avoid data theft or data eavesdropping.

Management, Software, Electronic mail systems, Email, Technology application, Levi Strauss & Co., Electronic data interchange, EDI (Electronic data interchange), Purchasing departments

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