Mahaffey Fabric Structures

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Wednesday, July 23, 2008
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PURCHASE

Making your cash purchase of a temporary fabric structure with funds available from working capital is beneficial to you in several ways:
  • Service fees, interest expense and financial fees are waived.
  • Inventory cost is shown on the balance sheet subject to the depreciation methods used by the customer.
  • Customer ownership is immediate.
Although outright purchase may provide the lowest total cost, other factors should also be considered:
  • Working capital (cash) which could be used elsewhere is reduced.
  • Outright purchase converts cash into a fixed asset (inventory), thereby weakening the customer's "current" ratio. Accordingly, most companies prefer to use available credit lines or time purchase plans if ownership is intended.
Financing has the same general advantage offered by leasing or rental plans...limited cash outlay. However, financing provides the depreciation and tax benefits of a cash purchase (ownership).
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