Unit 7

Phase IV Part II: Credit Policies and Profitability Analysis

Overview:

This unit requires you to analyze the impact of various credit policies on your chosen company’s profitability. Consider different credit terms and policies that the company might adopt and evaluate how these would influence cash flow, risk, customer relations, and overall profitability. The objective is to understand how strategic credit management can be a tool for profitability optimization and risk mitigation.

Instructions:

Continue your ongoing analysis of your chosen company:

• Credit Policy Review: Examine different credit policies the company might consider, such as extending credit terms to customers or changing credit collection policies.

• Profitability Impact Assessment: Analyze how these credit policies could affect the company’s profitability, cash flow, and risk exposure.

• Policy Recommendation: Recommend an optimal credit policy for the company, justifying your choice based on the profitability and risk analysis.

Requirements:

• Length: 2-3 pages, excluding appendices and references.

• Formatting: APA style, Times New Roman, 12-point font, double-spaced.

• References: Use relevant financial sources and data to support your analysis