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| Topic: |
Business
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| Number of pages / Number of words: |
23 / 6408 |
Essay's paper body
If Lawrence Sports is fathoming the idea of granting credit they should take into consideration the carrying and opportunity costs involved. “Carrying costs include the delay in receiving cash, the losses from bad debts, and the costs of managing credit. Opportunity costs are the lost sales from refusing to offer credit†(Ross, Westerfield & Jaffe, 2005)...
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Lawrence Sports needs to increase the company’s customer base; this will increase cash flow and prepare LS for long-term opportunities. When Lawrence Sports is deciding on their optimal credit policy they need to pay attention to the characteristic of each customer.
A detailed collection procedure needs to be developed that will lay out what Lawrence Sports should do when an account become past due...
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