公司理财chap028

McGraw-Hill/IrwinCopyright©2008byTheMcGraw-HillCompanies,Inc.AllrightsreservedCHAPTER28CreditManagementSlide2Copyright©2008byTheMcGraw-HillCompanies,Inc.AllrightsreservedMcGraw-Hill/IrwinKeyConceptsandSkills•Understandtypicalcreditterms•Understandtheprocessusedfordecidingwhetherornottograntcredit•UnderstandhowtoevaluateoutstandingreceivablesSlide3Copyright©2008byTheMcGraw-HillCompanies,Inc.AllrightsreservedMcGraw-Hill/IrwinChapterOutline28.1TermsoftheSale28.2TheDecisiontoGrantCredit:RiskandInformation28.3OptimalCreditPolicy28.4CreditAnalysis28.5CollectionPolicy28.6HowtoFinanceTradeCreditSlide4Copyright©2008byTheMcGraw-HillCompanies,Inc.AllrightsreservedMcGraw-Hill/Irwin28.1TermsoftheSale•Thetermsofsalearecomposedof–CreditPeriod–CashDiscounts–CreditInstrumentsSlide5Copyright©2008byTheMcGraw-HillCompanies,Inc.AllrightsreservedMcGraw-Hill/IrwinTheCashFlowsofGrantingCreditCreditsaleismadeCustomermailscheckFirmdepositscheckBankcreditsfirm’saccountAccountsreceivableCashcollectionTimeSlide6Copyright©2008byTheMcGraw-HillCompanies,Inc.AllrightsreservedMcGraw-Hill/IrwinCreditPeriod•Creditperiodsvaryacrossindustries.•Generallyafirmmustconsiderthreefactorsinsettingacreditperiod:–Theprobabilitythatthecustomerwillnotpay–Thesizeoftheaccount–Theextenttowhichgoodsareperishable•LengtheningthecreditperiodgenerallyincreasessalesSlide7Copyright©2008byTheMcGraw-HillCompanies,Inc.AllrightsreservedMcGraw-Hill/IrwinCashDiscounts•Oftenpartofthetermsofsale•Thereisatradeoffbetweenthesizeofthediscountandtheincreasedspeedandrateofcollectionofreceivables.•Anexamplewouldbe“3/10,net30”–Thecustomercantakea3%discountifs/hepayswithin10days.–Inanyevent,s/hemustpaywithin30days.Slide8Copyright©2008byTheMcGraw-HillCompanies,Inc.AllrightsreservedMcGraw-Hill/IrwinTheInterestRateImplicitin3/10,net30Afirmofferingcredittermsof3/10,net30isessentiallyofferingtheircustomersa20-dayloan.Toseethis,considerafirmthatmakesa$1,000saleonday0.Somecustomerswillpayonday10andtakethediscount.Othercustomerswillpayonday30andforgothediscount.01030$97001030$1,000Slide9Copyright©2008byTheMcGraw-HillCompanies,Inc.AllrightsreservedMcGraw-Hill/Irwin01030+$970–$1,000Acustomerthatforgoesthe3%discounttopayonday30isborrowing$970for20daysandpaying$30interest:36520)1(000,1$970$R970$000,1$)1(36520R%35.747435.01970$000,1$20365RTheInterestRateImplicitin3/10,net30Slide10Copyright©2008byTheMcGraw-HillCompanies,Inc.AllrightsreservedMcGraw-Hill/IrwinCreditInstruments•Mostcreditisofferedonopenaccount—theinvoiceistheonlycreditinstrument.•PromissorynotesareIOUsthataresignedafterthedeliveryofgoods.•Commercialdraftscallforacustomertopayaspecificamountbyaspecificdate.Thedraftissenttothecustomer’sbank.Whenthecustomersignsthedraft,thegoodsaresent.•Banker’sacceptancesallowabanktosubstituteitscreditworthinessforthatofthecustomer,forafee.•Conditionalsalescontractsletthesellerretainlegalownershipofthegoodsuntilthecustomerhascompletedpayment.Slide11Copyright©2008byTheMcGraw-HillCompanies,Inc.AllrightsreservedMcGraw-Hill/Irwin28.2TheDecisiontoGrantCredit:RiskandInformation•Considerafirmthatischoosingbetweentwoalternativecreditpolicies:–“InGodwetrust—everybodyelsepayscash.”–Offeringtheircustomerscredit.•Theonlycashflowofthefirststrategyis:Q0×(P0–C0)Slide12Copyright©2008byTheMcGraw-HillCompanies,Inc.AllrightsreservedMcGraw-Hill/IrwinTheDecisiontoGrantCredit:RiskandInformation01…andgetpaidin1periodbyh%ofourcustomers.Theexpectedcashflowsofthecreditstrategyare:h×Q0×P0′′Weincurcostsupfront…–C0×Q0′′Slide13Copyright©2008byTheMcGraw-HillCompanies,Inc.AllrightsreservedMcGraw-Hill/IrwinTheDecisiontoGrantCredit:RiskandInformationNPVcash=Q0×(P0–C0)h×Q0×P0′′(1+RB)–C0×Q0′′+NPVcredit=1.Thedelayedrevenuesfromgrantingcredit:2.Theimmediatecostsofgrantingcredit:3.Theprobabilityofrepayment:h4.Thediscountrate:RBP0×Q0′′C0×Q0′′•TheNPVofthecashonlystrategyis:•TheNPVofthecreditstrategyis:•Thedecisiontograntcreditdependsonfourfactors:Slide14Copyright©2008byTheMcGraw-HillCompanies,Inc.AllrightsreservedMcGraw-Hill/IrwinExampleoftheDecisiontoGrantCredit•Afirmcurrentlysells1,000itemspermonthonacashbasisfor$500each.•Iftheyofferedtermsnet30,themarketingdepartmentbelievesthattheycouldsell1,300itemspermonth.•Thecollectionsdepartmentestimatesthat5%ofcreditcustomerswilldefault.•Thecostofcapitalis10%perannum.Slide15Copyright©2008byTheMcGraw-HillCompanies,Inc.AllrightsreservedMcGraw-Hill/IrwinExampleoftheDecisiontoGrantCreditNoCreditNet30Quantitysold1,0001,300Sellingprice$500$500Unitcost$400$425Probabilityofpayment100%95%Creditperiod(days)030Discountrateperannum10%Slide16Copyright©2008byTheMcGraw-HillCompanies,Inc.AllrightsreservedMcGraw-Hill/IrwinExampleoftheDecisiontoGrantCreditTheNPVofcashonly=1,000×($500–$400)=$100,000TheNPVofNet30:1,300×$500×0.95–1,300×$425+(1.10)30/365=$60,181.58Slide17Copyright©2008byTheMcGraw-HillCompanies,Inc.AllrightsreservedMcGraw-Hill/IrwinExampleoftheDecisiontoGrantCredit•Howhighmustthecreditpricebetomakeitworthwhileforthefirmtoextendcredit?TheNPVofNet30mustbeatleastasbigastheNPVofcashonly:365/30