Credit investigation, Managerial Accounting

Assignment Help:

Once the credit information is accumulated the subsequent step is to analyze the gathered information and isolate those matters that may need further investigation. The factors which affect the extent and nature of credit investigation are given as:

  • Category of customer, whether new or existing
  • The customer's background, business line and the related trade risks
  • The nature of products-perishable or seasonal
  • The size of the customer's demand and expected additional volume of business with him or her
  • Company's credit practices and policies
  • Capacity: Capacity refers to the capability of the buyer to pay the due on time and is generally judged through the past turnover and the repayment behaviour
  • Character: Character considers as the willingness of the buyer to pay. The character of the buyer is usually judged by his or her past record of payments and default history if any.
  • Collateral: it implies that the security against the credit granted to customers. A buyer willing to furnish sufficient collateral is judged as more creditworthy as compared to buyers who are not capable to furnish any collateral.
  • Conditions: this is here referring to the sensitivity of the buyer to common economic environment.

Related Discussions:- Credit investigation

First cut analysis of costs , First Cut Analysis of Costs The allocati...

First Cut Analysis of Costs The allocation of costs and assets will produce a value chain that illustrates graphically the distribution of a firm's costs. It can prove reveali

What is pricing under decline stage, Q. What is Pricing under decline stage...

Q. What is Pricing under decline stage? Pricing under decline stage: under this stage sales are at their highest point. He should reduce the price if necessary taking the compe

Explain briefly about variances, Normal 0 false false false...

Normal 0 false false false EN-IN X-NONE X-NONE MicrosoftInternetExplorer4

Case study, 1 Describe the impact of different types of standards on motiva...

1 Describe the impact of different types of standards on motivations, and specifically, the likely effect on motivation of adopting the labor standard recommended for Geeta & Compa

Explain the process of financial intermediation, Question 1: i) Explai...

Question 1: i) Explain the process of financial intermediation and discuss the existence of banks. ii) Examine the implications of the existence of financial intermediarie

Illustrate the concept of cost, Illustrate the concept of Cost The term...

Illustrate the concept of Cost The term cost indicates the amount of expenditure (actual or national) incurred on, or attributable to, a specified thing or thing or cost unit.

Determine the working capital needs, Himalaya Ltd.'s Profit and Loss Accoun...

Himalaya Ltd.'s Profit and Loss Account for the year ended on 31st December 2005 is specified below. You are needed to determine the working capital needs under operating cycle met

Determine the price determination process, Determine the Price determinatio...

Determine the Price determination process 1) Estimating the demand for the product: the first step in determining the price of a new product is to estimation the anticipated

Explain the investment versus speculation, Explain the Investment versus Sp...

Explain the Investment versus Speculation? In brief describes the following terms: a) Investment versus Speculation. b) Active and Passive Equity Management c) Systematic v

Explain the methods of pricing, Explain the Methods of pricing The fol...

Explain the Methods of pricing The following methods are used for intra company transfer pricing: 1) Total cost method: transfer is made at absorption cost which is the t

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd