Gentry-De La Garza Model
 |
Definition of 'Gentry-De La Garza Model'A different way of managing account receivables, proposed by college professors James A. Gentry and Jesus M. De La Garza in the mid-1980s. The Gentry-De La Garza model gives three reasons as to why accounts receivable balances may increase: sales pattern effects, collection experience effects and joint effect. Together they equal the difference between the receivables balances and allow companies to increase the speed of cash inflows and reduce the speed of cash outflows |
 |
Investopedia explains 'Gentry-De La Garza Model'Because it separates receivables into three quantifiable categories, the Gentry-De La Garza model allows financial managers to instantly detect whether an increase in receivables is due to rising sales levels or faulty credit controls. Eroding collections may be a sign that the company is not forceful or persistent enough in collecting overdue accounts or that credit is being granted too freely. Being able to recognize these issues right away helps a company refine its processes and become more efficient. |
Related Definitions
Articles Of Interest
-
Pay Attention To The Proxy Statement
Don't overlook this overview of a company's well-being. -
Warren Buffett: How He Does It
We look at the Sage of Omaha's methodology for evaluating value stocks. -
Explaining Amortization In The Balance Sheet
Amortization is important to account for intangible assets. Read to find out more about amortization. -
Understanding Off-Balance Sheet Financing
For anyone who was invested in Enron, off-balance sheet (OBS) financing is a scary term. Off-balance sheet financing means a company does not include a liability on its balance sheet. It is ... -
Top 4 Most Competitive Financial Careers
If your goals include a big paycheck and working for a Wall Street firm, then you need to learn how to meet employers' expectations. -
Choose A Fund With A Winning Manager
We break down the key components of analyzing a fund manager's performance so you can find a winner. -
George Soros: The Philosophy Of An Elite Investor
George Soros spent decades as one of the world's elite investors, and even he didn't always come out on top. But when he did, it was spectacular. -
A Day In The Life Of A Public Accountant
Here's an inside look at the workdays of two experienced CPAs, to give you an idea of what it might be like to pursue a career as a public accountant. -
Earnings Guidance: Can It Accurately Predict The Future?
Explore the controversies surrounding companies commenting on their forward-looking expectations. -
Making It Big On Wall Street
Read about some of the most glamorous Wall Street jobs and what it takes to land one.
Free Annual Reports