SCHOOL OF BUSINESS AND TECHNOLOGY

DEPARTMENT OF BUSINESS
MGT413 CREDIT MANAGEMENT DATE: 08th November 2022

CAT FOR DEGREE IN BUSINESS MANAGEMENT

INSTRUCTIONS: ATTEMPT ANY ONE QUESTION.

QUESTION ONE (20 Marks)

i. Providing credit to customers can offer some major benefits to a business. With reference
to the above statement, analyze five advantages of offering credit to a seller.
ii. Examine five factors that a credit officer should consider when appraising a customer for
a credit facility.
iii. Describe the four functional units of a credit department.

QUESTION TWO (20 Marks)

The following information was obtained from the books of SJGB Enterprises Ltd. At the close of
financial year ended 2021.

Credit sales of Kshs. 300,000. Opening Inventory Kshs. 9,000. Closing Inventory Kshs. 15,000
Cost of Goods Sold Kshs. 150,000. Average Accounts Receivable of Kshs. 15,000. Accounts
Payable Kshs. 10,500.

Required;

i. Calculate SJGB Enterprises Ltd. Cash Conversion Cycle.

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Due on or before Thursday 10th November 2022.

You either be typed or handwritten but ensure your writing is legible.

Send to my email address wairimukamunyu@yahoo.com

For the Garissa group only. Kajiado group to submit theirs physically during class time.

20% of the Final Marks

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