Strategic Debtor Management and Terms of Sale

This book critically evaluates the strategic financial and marketing significance of credit terms management within a theoretical context of wealth maximisation and empirical research. Although most companies still adhere to standard industry terms even when so many debtors default, we shall prove that if a company is unique with respect to its revenue function, cost function, access to the capital market and customer clientele, its optimal debtor policy will be unique. And so too, will be its net investment in working capital.

Content

1. An Overview
   1. Introduction
   2. Objectives of the Text
   3. Outline of the Text
   4. Summary and Conclusions
   5. Selected References
2. The Effective Credit Price, Decision To Discount And Opportunity Cost Of Capital
   1. Introduction
   2. The Effective Credit Price
   3. The Effective Discount Price
   4. The Decision to Discount
   5. The Opportunity Cost of Capital Rate
   6. Summary and Conclusions
   7. Selected References
3. Working Capital Management and the Credit Related Funds System
   1. Introduction
   2. Working Capital Management: An Overview
   3. Working Capital Structure: An External View
   4. Working Capital and “Window Dressing”
   5. The Working Capital Cycle: An External View
   6. Working Capital: An Internal Perspective
   7. The Credit Related Fund System
   8. The Development of Theory
   9. Summary and Conclusions
   10. Selected References
4. The Strategic Impact of Alternative Credit Policies on Working Capital and Company Profitability
   1. Introduction
   2. Effective Prices and the Creditor Firm
   3. Alternative Credit Policies, Working Capital Investment and Corporate Profitability
   4. Summary and Conclusions
5. Empirical Evidence and Theoretical Review
   1. Introduction
   2. The Theory
   3. The Empirical Evidence
   4. Late Payment and the Case for Legislation
   5. Summary and Conclusions
   6. Selected References