chap028 - Chapter 28 CREDIT MANAGEMENT 28.1 28.2 28.3 28.4...

Info iconThis preview shows pages 1–4. Sign up to view the full content.

View Full Document Right Arrow Icon
Chapter 28 CREDIT MANAGEMENT SLIDES CHAPTER ORGANIZATION 28.1 Terms of the Sale Credit Period Cash Discounts 28.1 Key Concepts and Skills 28.2 Chapter Outline 28.3 Terms of the Sale 28.4 The Cash Flows of Granting Credit 28.5 Credit Period 28.6 Cash Discounts 28.7 The Interest Rate Implicit in 3/10, net 30 28.8 The Interest Rate Implicit in 3/10, net 30 28.9 Credit Instruments 28.10 The Decision to Grant Credit: Risk and Information 28.11 The Decision to Grant Credit: Risk and Information 28.12 The Decision to Grant Credit: Risk and Information 28.13 Example of the Decision to Grant Credit 28.14 Example of the Decision to Grant Credit 28.15 Example of the Decision to Grant Credit 28.16 Example of the Decision to Grant Credit 28.17 The Value of New Information about Credit Risk 28.18 Future Sales and the Credit Decision 28.19 Optimal Credit Policy 28.20 Optimal Credit Policy 28.21 Credit Analysis 28.22 Credit Analysis 28.23 Collection Policy 28.24 Average Collection Period 28.25 Accounts Receivable Aging Schedule 28.26 Collection Effort 28.27 Collection Effort 28.28 Factoring 28.29 How to Finance Trade Credit 28.30 Quick Quiz
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
A-72 CHAPTER 28 Credit Instruments 28.2 The Decision to Grant Credit: Risk and Information The Value of New Information about Credit Risk Future Sales 28.3 Optimal Credit Policy 28.4 Credit Analysis Credit Information Credit Scoring 28.5 Collection Policy Average Collection Period Aging Schedule Collection Effort Factoring 28.6 How to Finance Trade Credit ANNOTATED CHAPTER OUTLINE Slide 28.1 Key Concepts and Skills Slide 28.2 Chapter Outline 28.1. Terms of the Sale Slide 28.3 Terms of the Sale Credit period – amount of time allowed for payment Cash discount and discount period – percent of discount allowed if payment is made during the discount period Slide 28.4 The Cash Flows of Granting Credit The terms 2/10, net 60 mean you receive a 2% discount if you pay in 10 days; otherwise, the total amount is due in 60 days if the discount is not taken. In this example, the 60 days is the credit period, the 10 days is the discount period, and the 2% is the cash discount amount. The invoice date is the date for which the credit period starts. This is normally the shipping date, but some companies may post-date the invoice to encourage customers to order early.
Background image of page 2
CHAPTER 28 A-73 .A Credit Period Slide 28.5 Credit Period Credit Period – the length of time before the borrower is supposed to pay Two components: net credit period and discount period Invoice date – begins the credit period, usually the shipping or billing date -ROG – receipt of goods - EOM – end-of-month (invoice date is the end of the month) - Seasonal dating – invoice date corresponds to the “season” of the goods Length of the credit period depends on: -Buyer’s inventory and credit cycle -Perishability and collateral value -Consumer demand -Cost, profitability and standardization -Credit risk -Size of the account -Competition -Customer type .B Cash Discounts Slide 28.6
Background image of page 3

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 4
This is the end of the preview. Sign up to access the rest of the document.

Page1 / 9

chap028 - Chapter 28 CREDIT MANAGEMENT 28.1 28.2 28.3 28.4...

This preview shows document pages 1 - 4. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online