Credit Management参考.ppt

Chapter Outline 29.1 Terms of the Sale 29.2 The Decision to Grant Credit: Risk and Information 29.3 Optimal Credit Policy 29.4 Credit Analysis 29.5 Collection Policy 29.6 How to Finance Trade Credit 29.7 Summary Conclusions Introduction A firm’s credit policy is composed of: Terms of the sale Credit analysis Collection policy This chapter discusses each of the components of credit policy that makes up the decision to grant credit. The Cash Flows of Granting Credit 29.1 Terms of the Sale The terms of sale of composed of Credit Period Cash Discounts Credit Instruments Credit Period Credit periods vary across industries. Generally a firm must consider three factors in setting a credit period: The probability that the customer will not pay. The size of the account. The extent to which goods are perishable. Lengthening the credit period generally increases sales Cash Discounts Often part of the terms of sale. Tradeoff between the size of the discount and the increased speed and rate of collection of receivables. An example would be “3/10 net 30” The customer can take a 3% discount if he pays within 10 days. In any event, he must pay within 30 days. The Interest Rate Implicit in 3/10 net 30 A firm offering credit terms of 3/10 net 30 is essentially offering their customers a 20-day loan. To see this, consider a firm that makes a $1,000 sale on day 0 The Interest Rate Implicit in 3/10 net 30 Credit Instruments Most credit is offered on open account—the invoice is the only credit instrument. Promissory notes are IOUs that are signed after the delivery of goods Commercial drafts call for a customer to pay a specific amount by a specific date. The draft is sent to the customer’s bank, when the customer signs the draft, the goods are sent. Banker’s acceptances allow a bank to substitute its creditworthiness for the customer, for a fee. Conditional sales contracts let the seller retain legal ownership of the goods until the customer has completed payment. 29.2 The D