Evaluation of Credit Management in the Manufacturing Company

Credit was born from Alfred Sloan, “ He set up the nation 's first national consumer credit agency in the 1919 to make his cars affordable”( Digital History). Sloan wanted to make money, sloan was convinced that Americans were willing to pay extra for luxury and prestige. Thus he he created credit so people would buy his cars, even if they were costly. With this new product many americans began to buy cars, clothes,furniture,household products,e.t.c. Pretty soon cars came a symbol of the new society forming in the 1920’s.”In that year, one American out of every 5 owned a car, compared to one out of every 37 English and out of every 40 French car owners”(Digital History). In other words Sloan didn’t care about lowering his price so that more people could

Credit cards have become increasingly popular world-wide, making it easier to buy now and pay later but are they actually helping or hindering someone’s credit? “Maxed Out” by James D. Scurlock demonstrates how credit cards can hurt someone’s credit, while “Why Won’t Anyone give Me a Credit Card” by Kevin O’Donnell demonstrates how someone may have financial stability to pay off a credit card, but still be consistently denied one by the credit card companies. Owning credit cards is not the problem; the problem is being irresponsible with it.

As you can see there are many ways to spend using credit. There are just as many ways to build your debt and ruin your credit report. Lenders may end up repossessing things you have purchased and collecting the things you’ve placed on collateral and eventually causing you to file for bankruptcy if you cannot pay your debt. Debt can be useful

Credit was a new concept, and debt was now fashionable - there’s no question that people would take advantage of it. Unfortunately, this meant that people would place their invisible money on expensive items like cars, washing machines, stocks, etc. This was not the problem; the problem was when the bill came later, and people realized that the money wasn't so imaginary after all. Stock speculation was also a big problem; people would take this credit, or perhaps their little bits of real money, and place it into stocks. The problem? They didn’t really know how the stocks worked. They would just place their money into whatever stock sounded the best, without paying attention to whether or not the stocks were doing well, and at that point they would basically be throwing their money away. “With debt no longer regarded as shameful, people bought on installment,” said author William E. Leuchtenburg, “Three out of every four radios were purchased on the installment plan, 60[%] of all automobiles and furniture. In other words consumers bought goods on installment at a rate faster than their income was expanding…” (Doc 6). Leuchtenburg explains that people used credit to pay for things they couldn’t afford, and they spent more money in credit than they

Richard Fairbank and Nigel Morris, both diligent entrepreneurs, started laying the bricks for their eventual successful company, Capital One, in the late 1980’s. They both worked in the Virginia-based “Signet Bank”. Fairbank started noticing trends in the financial industry that he felt Signet was missing out on. These opportunities were in the credit card industry. He, as well as all of Signet Bank knew that the credit card industry was very risky, but Fairbank was ready to take a chance in this, what can be, highly profitable field.

Credit cards were not common during this period. First appearing in 1950, these were used mainly by the wealthy for convenience instead of carrying cash or a checkbook (Durkin & Price, 2000, p. 624).

The first credit card allowed members to charge the cost of restaurant bills- only. This credit Card was by companies around the world for travel and entertainment. Frank Mcnamara of the inventors shared the story of when he left his wallet at home. He was dining at specialty restaurant with his wife when he noticed that he forgot his money at home. The next time he visited the restaurant he brought a small piece of cardboard with his signature on it to avoid the embarrassment again from happening. He discussed this with his fellow friends, also the other contributors of the makeing , ralph and Matty

The overall process of recording and processing financial events in a business is known as the accounting cycle. The collective process includes ten different steps that begin with analyzing and recording transactions and ending with post-closing and trial balance is prepared. Through this paper it will be explained all the steps with examples of how the steps are implemented in real life business situations.

The credit boom of the 1920’s is one of the things that contributed most to the stock market crash on 1929 and then the eventual cause of the Great Depression. “We find that the credit boom view provides a useful perspective on both the boom of the 1920s and the subsequent slump. In particular, it directs attention to the role played by the structure of the financial sector and the interaction of finance and innovation.” (Eichengreen) As many people know today, having a credit card and going shopping without realizing exactly how a credit card works can put the user in a tough situation. After a person puts something on credit they must pay it back at a later date. In the 1920’s the “credit boom” was where people had started to use credit more frequently and were getting carried away with the idea of credit. People putting more

     With religion playing an important role in the average Americans lives, consumerism began to grow in the white and blue-collar workers. Their families started to spend extra cash instead of saving it. Washing machines, dryers, and new cars became commonly bought items. The Homeowner who needed some extra cash, but couldn’t work enough hours to purchase that item when he needed it, started to use personal credit. This began the craze of credit cards. ”The Diner Club” introduced the first credit card in 1950: By the 1970s the ubiquitous plastic credit card had revolutionized personal and family finance”(Henretta, pg.790). The awareness of addition free time was aware

In the time between the end of World War II and the early 2000s, the ways consumers used debt changed significantly. However, one thing remained clear, borrowing became the new lifestyle that most Americans adopted. Borrowing allowed the average working and middle class person to purchase homes and the items that filled their interiors. It also became the fuel to a resurrecting economy. The trust between borrowers and lenders has encouraged the stimulation of the economy. Because of this, debt has played a crucial role in American history.

(e) Provide safeguards against the withdrawal of assets by the owners of the bankrupt firm and allow insolvent debtors to discharge all of their obligations and to start over unhampered by a burden of prior debt. (Points : 20)

For the Sales Department, it is but right that the clerk will seek the approval of the credit manager for customers

Britvic PLC was compelled in 2007 to increase with approximately 10 days the period in which credit customers pay their liabilities, so that the impact of economic recession over the organisation’s profit was reduced by maintaining the drop in the level of sales at an acceptable level. One year later, in 2008, an 8 days decrease in his ratio was recorded, followed by a 2 days increase in 2009. As reported by their financial statements, the debtors’ days ratio has been stable for the past two years, a sign of recovery after the economic recession, but not as low as in the economic boom, characteristic for the 2005-2006 period.

BBC’s credit policy was too lenient with customers who had the potential of repaying. If they were not repaying their own debt so quick they could have a potential balance with working capital. Unfortunately, there credit policy will be one that needs to be reviewed to raise capital. Specifically to mediate their immediate needs of