Credit Policy means such factors which affect the amount of investment in receivable and about which management has to take decisions for example credit period,…

From creation of receivables the firm gets a few advantages & it has to bear bad debts, administrative expenses, financing costs etc. In the management…

Are those terms on the basis of which credit sales are made to customers. These are also called terms of repayment of receivable. These are…

The term ‘Credit standard’s is basic yardstick of making credit sales to the customers. On the basis of credit standard it is determined to whom…

Is made to evaluate ability of the customers before making credit sales. A firm should determine procedure to evaluate applications for credit. On the basis…

Are needed because all customers do not pay in time. Some customers pay at slow rate and some do not make payment at all. The…

The collection policy followed by firm should be optimum. It should neither be too liberal nor too strict. Proper adjustment in credit policies should be…

It is difficult to infer organizational performance from one or two simple numbers. Nevertheless, in practice a number of different ratios are often calculated in…

Firms are financed by some combination o£ debt and equity. The right capital structure will depend on tax policy—high corporate rates favor debt, high personal…

In order to survive, firms must be able to meet their short-term obligations—pay their creditors and repay their short-term debts. Thus, the liquidity of the…