What is meant by the given trade credit terms

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Reference no: EM131488890

Question: 1. What is meant by the following trade credit terms: 2/10, net 30? 4/20, net 60? 3/15, net 45?

2. Define the following:

a. Line of credit

b. Commercial paper

c. Compensating balance

d. Prime rate

3. (Risk-return trade-off) The balance sheet from 2011 to 2014 for Amaze Online Ltd., a consultancy firm, has been provided (figures in thousands):

a. Compute current and debt ratios for 4 years.

b. What is your opinion of the company's liquidity and leverage? (Leverage usually shows the share of liabilities in assets). Please note that in all 4 years, the company experienced an increase in net profit.

c. What conclusions can you draw from the company's financial decisions in the last year?

Reference no: EM131488890

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