personal study blog

24

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First of all. I need to make a short intro.

I'm a student of accounting and finance with finance being my weak point. I need to get better, no. I need to be the best at it.

So, this blog is dedicated to me writing down anything I learn about finance, which I'll be doing every day. Let's try to keep it fun as well.

18.01.2026

[fynance]

60-day credit🍦

When a company sells something to a customer on credit basis i.e the customer will pay after a specific timeline. Even though making the sale added revenue and might've made profit as well but there's no cash received yet. It will come later and in this case 60 days later.

Now catch is companies still have to pay monthly wages, rent, buy raw materials for next orders. If the cash runs out and the customer hasn't paid yet. There needs to be a way to avoid the business failing because of lack of cash.

Because sometimes

Sales are increasing

Profit margins are positive

But cash runs out and business can't continue.

Credit sales increase revenue first but cash later

Why offer sales on credit in the first place❔

Imagine ✨ you are a distributor or retailer. Not the manufacturer.

You buy some goods from the manufacturer and plan to sell in to your customers.

If the manufacturer goes : "Give me money immediately for what you bought from me💢"

You'd go : "tf dude, let me make some money first by selling it to MY customers, cassh doesn't grow on trees. Wait a little. Maybe 60 days"

That's where the 60 days credit comes from.

From the buyers perspective, credit is a requirement not a luxury.

Now how this even starts❔from the company's pov 🫦

At some point they realize, if i offer credit customers are going to prefer me. So they offer better credit terms 30, 90, 60 days. Not because they like to but because it wins orders.

It's usually done by large firms with cash reserves or firms with bank support.

At some point offering credit becomes so normal that not offering credit makes companies lose customers i.e.they go to someone that gives credit.

Thus it is no longer a competitive advantage but an entry ticket.

Hehe

[fynance]

Public finance❔❔

It is the management of a country's expenditures, debts and revenue.

Components

Tax collection🐺

Budget🐶

Expenditures 🐻‍❄️

Deficit/surplus🐻

National debt🐨

Tax collection:🐺

It is a way for the government to earn revenue e.g income tax, sales tax, tariffs and duties.

Budget:🐶

The plan of what a government intends to have as expenditures in a fiscal year.

Expenditures:🐻‍❄️

Anything the government plans to spend money on. Can be infrastructure or education etc. Expenditure can be more than budget.

Deficit/surplus:🐻

If the government spends more than it collects in revenue .It is a deficit. If a government spends less than what it collects from tax it is a surplus.

National debt:🐨

If the government has deficit. It balances the difference by borrowing national loans.

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What is finance❔❔❔

It is the management of money and resources, in order to raise, save and invest it through activities like budgeting, investing, forecasting, borrowing and lending.

These activities are crucial to achieve financial goals and stability. 📊