Will you buy from suppliers on credit


Imagine that you are the owner/manager of a small business.

  1. What kind of business are you in?
  2. What kind of credit policy will you implement and why? What do you think your collection period will be? Explain your reasoning.
  3. Will you buy from suppliers on credit? What do you think your payables deferral period will be? Explain your reasoning.
  4. Do you believe your cash conversion cycle will be long (over 120 days), short (under 30 days) or medium? How did you reach that conclusion?

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Finance Basics: Will you buy from suppliers on credit
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