General Electric is serious about reducing the company's use of factoring.
In 2018, the company factored about one-half of its receivables, but it
expects eliminate all factoring in the near future. In 2016, the
company even went
so far as to sell receivables up to 5 years ahead of sales in order to
increase the then current cash flow. A consequence of eliminating
factoring is is that it will reduce cash flows this year. In fact, GE
expects cash flows for 2021 to take a hit of $3.5 to $4 billion, but it
will also reduce the interest paid on factoring. The elimination of
factoring is also a signal that GE management is confident of future
cash flows.
Wednesday, June 2, 2021
GE Kicks Factoring
