Delphi Ltd. has recently decided to enter the expanding market for minidisc players. The business will manufacture
Question:
The business is concerned about the financing implications of launching the new product, as it is already experiencing liquidity problems. In addition, it is concerned that the credit control department will find it difficult to cope. This is a new market for the business and there are likely to be many new customers who will have to be investigated for creditworthiness.
Calculations should be in thousands of dollars and to one decimal place only.
Required:
(a) Prepare an aging schedule of the monthly accounts receivable balance relating to the new product for each of the first four months of the new product's life, and comment on the results. The schedule should analyze the outstanding receivables according to customer type. It should also indicate, for each customer type, the relevant percentage outstanding in relation to the total amount outstanding for each month.
(b) Identify and discuss the factors that should be taken into account when evaluating the creditworthiness of the new business customers.
Accounts receivables are debts owed to your company, usually from sales on credit. Accounts receivable is business asset, the sum of the money owed to you by customers who haven’t paid.The standard procedure in business-to-business sales is that... Aging Schedule
Aging schedule is an accounting table that shows a company’s account receivables. It is an summarized presentation of accounts receivable into a separate time brackets that the rank received based upon the days due or the days past due. Generally...
Step by Step Answer:
Financial Management for Decision Makers
ISBN: 978-0138011604
2nd Canadian edition
Authors: Peter Atrill, Paul Hurley