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Quantitative and Qualitative measures of Credit control?
this the reason no one ans that one
What are three quantitative measures that can be applied to the collection policy of the firm?
a. Average collection period = Accounts receivable/Average daily credit sales An increase in the average collection period may be the result of a predetermined plan to expand credit terms or the consequence of poor credit administration. b. Ratio of bad debts to credit sales. An increasing ratio may indicate too many weak accounts or an aggressive market expansion policy. c. Aging of accounts receivable. Aging of accounts receivable is one way of finding out if customers are paying their bills within the time prescribed in the credit terms. If there is a buildup in receivables beyond normal credit terms, cash inflows will suffer and more stringent credit terms and collection procedures may have to be implemented.
What does a credit derivative refer to?
A credit derivative is a financial instrument which separates and transfers some of the credit risk of a loan. Some examples of credit derivatives are credit linked notes or credit default swaps.
Which parts of a credit history are most important for the calculation of credit score?
There are many aspects of your credit history that affect your credit score. 35% - Your Payment History - Credit cards, Telephone bills and other utility bills 30% - Amounts You Owe - Outstanding credit amounts in loans and credit cards 15% - Length of Your Credit History 10% - Types of Credit Used 10% - New Credit
How is your credit score computed?
Credit scores are personal information. If you can tell me how your credit score is computed then I will tell you how my credit score is computed. Okay?
