How to Determine an Appropriate Credit Level To Customers
It can be quite difficult to determine an appropriate credit level for a customer, since the amount of investigation required to develop an accurate picture of a potential customer’s financial...
View ArticleCredit Policy Example
A serious control problem arises when there is no formal definition of how to calculate a credit limit, what information is required of customers in order to determine the credit limit, the standard...
View ArticleOvercome Customer Credit Decision
A company may have many customers—perhaps thousands of them. It must decide, for each one, how much credit it will extend, the time period before which each payment is due, and the size and nature of...
View ArticleCredit Risk of Bonds [An Overview]
To raise funds, firms often issue bonds, which obligate the issuer to make payments of interest, and sometimes principal, to the lender on specified dates. Bond is a form of liability. In general, a...
View ArticleWhat Is Cost of Credit and How Is It Computed
The computation of the cost of credit—the cost of not taking credit terms extended for a business transaction, is an essential part of doing business. The cost of not taking trade credit (also known as...
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