Inventory is more attractive than accounts receivable as a short-term collateral since it normally has a market value greater than its book value, which is used to establish its value as collateral.

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Inventory is often considered less attractive than accounts receivable as short-term collateral because inventory may depreciate, become obsolete, or be harder to sell at its book value, whereas accounts receivable represent money already owed to the company by its customers, making it a more reliable source of repayment.

Inventory Is More Attractive Than Accounts Receivable as a Short-Term