AGING OF ACCOUNTS is the classification of accounts by the time elapsed after the date of billing or the due date. The longer a customers account remains uncollected or the longer inventory is held, the greater is its realization risk. If a customers account is past due, the company also has an Opportunity Cost of funds tied-up in the receivable that could be invested elsewhere for a return. An aging schedule of accounts receivable may break down receivables from 1-30 days, 31-60 days, 61-90 days, and over 90 days. With regard to inventory, if it is held too long, obsolescence, spoilage, and technological problems may result. Aging can be done for other accounts such as fixed assets and accounts payable. See also ACCOUNT AGING.
SHORT TERM DEBT is any debt owed by a company that is due and payable within one year. The debt is often made up of short-term bank loans the company is liable for.
ACTIVE MANAGEMENT, in securities, is the trading of securities to take advantage of market opportunities as they occur, in contrast to a buy-and-hold strategy.
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