Professional Documents
Culture Documents
Management
Collection Cost
and customer.
Standards
Character
• This is determined by your credit score and credit history.
Capacity
• Based on your income and other financial obligations, will you be able to pay
back the loan?
of Credit
Capital
• This is determined by applicant’s debt relative to equity.
Conditions
• How do you intend to use the money?
Credit Credit terms are the terms of sale for
customers who have been extended credit
Credit customers.
Monitoring
whether customers are paying according to
the stated credit terms.
Techniques for Credit Monitoring
Sample
55% and desired rate of return is 20%. Fixed
expenses amount to P150,000.
Sample negligible in the proposed policy. The firm’s bad debt expense
is currently 0.025 percent of sales. The firm’s required return
on equal-risk investments is 20 percent.