Determination of credit terms, Financial Management

Assignment Help:

Determination of Credit Terms:-

The second feature of receivable management, subsequent to setting the credit standards and assessment of credit worthiness of the customers, is the purpose of the terms on which credit will be given. Credit terms are the terms which narrate to the repayment of the amount of credit sale. There are 3components of credit terms namely:-

(i) Credit Period: - Credit period is the time phase for which credit is extended to the customers and after which they must make the payment.

(ii) Cash Discount: - To push the customers for prompt payment cash discount may be offered by the firm. Customers can take benefit of cash discount by paying amount within the period of cash discount.

 (iii) Cash Discount Period: - It is the period within which cash discount is available


Related Discussions:- Determination of credit terms

maximization of a company''s share, a. The primary financial objective of ...

a. The primary financial objective of a company is the maximization of the wealth of shareholders ...per corporate finance theory.    Though, this objective is usually replaced by

Explain about interest rate management, Interest rate caps as well as colla...

Interest rate caps as well as collars are available on the over the counter (OTC) market or may be devised using market based interest rate options. They may be utilize to hedge cu

Financial management issue, Harrelson Inc. currently has $750,000 in accoun...

Harrelson Inc. currently has $750,000 in accounts receivable, and its days sales outstanding (DSO) is 55 days. It wants to reduce its DSO to 35 days by pressuring more of its custo

What are the specefic control procedures of benchmarking, What are the spec...

What are the specefic control procedures of benchmarking Specific control procedures must be in place which include: O Organisational structure (clear lines of responsibilit

What is bid, Bid The price buyers provide to acquire securities or pri...

Bid The price buyers provide to acquire securities or privacy from sellers.

Prepare a revised aging schedule of account, Debit Credit Accounts recei...

Debit Credit Accounts receivable $300,000 Allowance for doubtful accounts $35,000 Sales for 2010 were $5,500,000. All sales were sales on account. At the end of each month

Laspeyres method, Laspeyres Method Laspeyres method uses the quantities...

Laspeyres Method Laspeyres method uses the quantities consumed during the base period in computing the index number. This method is also the most commonly used method which inc

Components of a callable bond, Components of a Callable Bond A callable...

Components of a Callable Bond A callable bond can be thought of as the sale of a call option by the investor to the issuer as it allows the issuer to repurchase the bond from t

Calculate total development cost, A developer has purchased a commercial of...

A developer has purchased a commercial office site in Melbourne and wishes to develop a building which will be sold to an institutional owner before completion of the building.

Working capital as a percentage of total assets, Q. Working Capital as a Pe...

Q. Working Capital as a Percentage of Total Assets? This approach of estimation of working capital requirement is based on the fact that the total assets of the firm arc consis

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd