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प्रश्न
Read the given passage and answer the following questions:
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VTM Textile Mills is one of the largest manufacturers of various types of textile products from Ahmedabad, Gujarat. The company is equipped with state-of-the-art dyeing, printing and processing and garmenting facilities. Due to the prolonged pandemic and slackness in the market demand, the company is facing shortage of funds. The company has started preliminary work for expansion of textile manufacturing capacity in their existing plant at Ahmedabad as well as installation of a new manufacturing unit at Panipat, Haryana at an estimated cost of ₹ 10 Crore. The company has decided to issue equity shares for this purpose. Also, the company needs funds for meeting its day-to-day expenses like daily wages and overheads, etc. The finance manager of the company approached one of its suppliers to grant two months credit on purchase of raw cotton. This would enable the company to get cotton supplies without making immediate payments. |
“The finance manager of the company approached one of its suppliers to grant two months credit on purchase of raw cotton. This would enable the company to get cotton supplies without making immediate payments.”
Which source of finance is highlighted in the given lines?
विकल्प
Public deposits
Debentures
Trade credit
Equity shares
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उत्तर
Trade credit
Explanation:
- Trade credit is a short-term source of finance where a supplier allows the buyer (the company) to purchase goods and pay later (in this case, after two months).
- This arrangement enables the company to get the necessary raw cotton without making immediate payments, thus easing its cash flow.
