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http://cdr.uum.edu.my/jspui/handle/123456789/86| Title: | Credit Sale Of Big Tree Agrotech: To Implement Or Not To Implement |
| Authors: | Nordin, Norhafiza Abdul Rahman, Nora Azureen |
| Issue Date: | 2019 |
| Publisher: | IMBRe |
| Abstract: | This case study is about Khairil and Azizi, the owners of Big Tree Agrotech who were in a dilemma whether to implement a credit sale or not. This is because a credit sale has advantages and disadvantages. Before offering a credit sale facility, a company needs to fully consider the effects of additional risks that come with it. To minimize the risk, the person in charge, i.e. the credit manager, needs to thoroughly evaluate the customers’ creditworthiness. This may include getting the customers' credit references and credit reports. The biggest advantage of credit sale is it may increase sale. Although credit facility increases sale but at the same time it also increases risk. One of the disadvantages of selling on credit is it affects the company’s cash flow. This is because payment will only be received later, yet the company may have to settle other obligations in cash. Nevertheless, offering credit to customers is one of the effective tools to attract more customers, to increase sale and to stay competitive in the marketplace. Thorough planning must be done before a company decides to offer credit sale. The consequences of providing credit sale can be significant as it affects a company’s liquidity, profitability and funds needed. A well-established credit policy will definitely help the company to minimize the risks. This case is designed to guide the students to identify and analyze the important factors that should be taken into consideration in deciding to offer credit facility. In brief, the purpose of this case is to discuss the important role of credit sale and; advantages and disadvantages of offering credit facility. |
| URI: | http://cdr.uum.edu.my/jspui/handle/123456789/86 |
| Payment Link: | http://epay.uum.edu.my/go.php?billcode=CDRCASE&productid=TC153-1 |
| Appears in Collections: | Cases in CDR |
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