线性chapter9.ppt

华中农业大学会计系 Accounts Receivable and Inventory Management chapter 9 Learning objectives How and why firms manage accounts receivable and inventory. Computation of optimum levels of accounts receivable and inventory. Alternative inventory management approaches. How firms make credit decisions and create collection policies. Accounts Receivable Management why firms manage accounts receivable Accounts receivable as large investment for most companies –Extend credit whenever the marginal returns from extending credit exceed the marginal costs –Liberal credit policy provides returns in the form of increased sales and gross profit Credit and Collection Policies Credit Standards –Quality Probability a customer will fail to repay –Measures of quality Bad-debt ratio Credit Standards The financial manager should continually lower the firm’s credit standards as long as profitability from the change exceeds the extra costs generated by the additional receivables. Credit Standards A larger credit department Additional clerical work Servicing additional accounts Bad-debt losses Opportunity costs Opportunity costs profitability of additional sales =contribution margin per unit ×Additional sales Opportunity costs = Investment in additional A/R ×required return Investment in additional A/R = additional investment in A/R ×(variable cost per unit/sale) Additional investment in A/R =Additional sales /receivables turnover Example Basket Wonders is not operating at full capacity and wants to determine if a relaxation of their credit standards will enhance profitability. The firm is currently producing a single product with variable costs of $20 and selling price of $25. Relaxing credit standards is not expected to affect current customer payment habits. --continued Additional annual credit sales of $120,000 and an average collection period for new accounts of 3 months is expected. The before-tax opportunity cost for each dollar of funds died-up in additi