Factoring can be a number of things with totally different
definitions, and for that reason, we're going to through all of the
major ones, which are basically in the fields of mathematics and
economics. They are relatively simple, common concepts, but we'll try
and cover them as thoroughly as possible. We'll start with economics.
This is a fairly basic concept used in economics that allows a company to discharge its accounts receivable without having to call in the credit of all the people who owe it money. Basically, it's a quick way of getting money. What it does is this: when a company has a bunch of debtors, it is owed the money that they have been lent. This appears on their balance sheet as money that they technically have, though they don't physically have it yet. Sometimes companies need the money of their debtors, and when they do, they have two choices. They can either call in the debtors line of credit, meaning the creditors have to pay off all of their debts immediately (as long as this is contractually allowed), or they can enter a factoring agreement.
The factoring definition here is basically that the company sells these debts to a bank or another company called the factor in exchange for a discounted lump sum. They are basically giving the factor the debt and saying, "you collect this, and we'll charge you less for it than it is actually worth." This allows the original company to get the money they need without damaging the trust of their debtors, and without having to lose any actual business. The factor is contractually obligated to give the debtors the same deal they had while underneath the initial company, so they aren't in any different of a situation, they are just paying their debts to a third party rather than to the original company. It's a relatively simple concept, and it is cheaper than a loan.
4x2 + 3x
This equation has factors of x in each of its units, so you can pull out the x and get:
x (4x+3). This is the exact same equation, but it's a little easier to solve because you don't have to deal with taking the square root of everything to simplify it. Basically, the fewer exponents the better. Now, you could do this in arithmetic, though it wouldn't make much of a difference, as arithmetic doesn't have variables and therefore can be solved relatively easily. For example:
12 + 8 + 4
can be simplified to:
4 (3 + 2 +1)
So the solution is either 4 x 6 = 24 or 12 + 8 + 4 = 24. Either way it's the same thing, and frankly, the factoring isn't the best use of your time when you are doing arithmetic. But that's where the basic concept comes from. The idea is pulling out the common factors in each of the units to try and strip down the unit to their most basic mathematical form. Which makes algebra a lot easier. There are some forms of factoring that are significantly more complex. For example:
x2 + 6x + 8 = 0 can be factored down to an equation with no exponents, making it preferable to this, it's original form You can factor out each of the components to get that
(x + 4) (x +2) = 0
Basically, this is much easier to solve, because it gives you two possible answers for what x can be. Since for a multiple of something to equal 0 requires that one of the multiples be 0, either x + 4 or x +2 must equal 0. So x must either be -4 or -2 for this equation to work.
Factoring Definition for Economics
This is a fairly basic concept used in economics that allows a company to discharge its accounts receivable without having to call in the credit of all the people who owe it money. Basically, it's a quick way of getting money. What it does is this: when a company has a bunch of debtors, it is owed the money that they have been lent. This appears on their balance sheet as money that they technically have, though they don't physically have it yet. Sometimes companies need the money of their debtors, and when they do, they have two choices. They can either call in the debtors line of credit, meaning the creditors have to pay off all of their debts immediately (as long as this is contractually allowed), or they can enter a factoring agreement.
The factoring definition here is basically that the company sells these debts to a bank or another company called the factor in exchange for a discounted lump sum. They are basically giving the factor the debt and saying, "you collect this, and we'll charge you less for it than it is actually worth." This allows the original company to get the money they need without damaging the trust of their debtors, and without having to lose any actual business. The factor is contractually obligated to give the debtors the same deal they had while underneath the initial company, so they aren't in any different of a situation, they are just paying their debts to a third party rather than to the original company. It's a relatively simple concept, and it is cheaper than a loan.
Factoring Definition for Math
In math, factoring is a pretty basic concept. It applies both in arithmetic and algebra. So let's look at what it means: Basically, any number is a factor another number. This means that the number is a multiple of another number. For example, 3 is a factor of 6, because when you multiply 3 times 2, it equals 6. 6 is not a factor of three, because when you divide 3 by 6 it does not equal an integer or a full number. 6, instead, is a factor of numbers like 12, 18, 24, 30 and so on. That's what a factor is, but it's not factoring. The factoring definition is basically that you a take an equation and you "pull out" a common factor of all of the units. This is used most regularly in the field of algebra. Here's an example:4x2 + 3x
This equation has factors of x in each of its units, so you can pull out the x and get:
x (4x+3). This is the exact same equation, but it's a little easier to solve because you don't have to deal with taking the square root of everything to simplify it. Basically, the fewer exponents the better. Now, you could do this in arithmetic, though it wouldn't make much of a difference, as arithmetic doesn't have variables and therefore can be solved relatively easily. For example:
12 + 8 + 4
can be simplified to:
4 (3 + 2 +1)
So the solution is either 4 x 6 = 24 or 12 + 8 + 4 = 24. Either way it's the same thing, and frankly, the factoring isn't the best use of your time when you are doing arithmetic. But that's where the basic concept comes from. The idea is pulling out the common factors in each of the units to try and strip down the unit to their most basic mathematical form. Which makes algebra a lot easier. There are some forms of factoring that are significantly more complex. For example:
x2 + 6x + 8 = 0 can be factored down to an equation with no exponents, making it preferable to this, it's original form You can factor out each of the components to get that
(x + 4) (x +2) = 0
Basically, this is much easier to solve, because it gives you two possible answers for what x can be. Since for a multiple of something to equal 0 requires that one of the multiples be 0, either x + 4 or x +2 must equal 0. So x must either be -4 or -2 for this equation to work.
No comments:
Post a Comment