Credit Management: An Examination of Policy Choices, Practices and Late Payment in UK Companies

Pike, Richard; Cheng, Nam Sang

doi:10.1111/1468-5957.00403

Cited by 76 publications

(78 citation statements)

References 20 publications

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“…Then, this strict collection policy leads to loose purchasers and reduces profits. In this respect, Pike and Cheng (2003) stressed that working capital management looks for creating a high quality accounts receivable portfolio in order to improve corporate value.…”

Section: Accounts Receivable and Corporate Profitabilitymentioning

confidence: 99%

“…Alternatively, they may charge interest for the one who pays later. As noted by Pike and Cheng (2003), a high quality portfolio of accounts receivable has significant implications for corporate value. In fact, the increase of accounts receivable implies management expenses and additional working capital, both of them decrease the value of the company.…”

Section: Variables Of the Analysismentioning

confidence: 99%

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The Impact of Working Capital Management on Profitability: The Case of Small and Medium-Sized Export Companies in Tunisia

Bellouma

2011

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Working capital is an important component in the financial decision of the company. An optimal working capital management is reached through a trade off between profitability and liquidity. This study aims to provide empirical evidence about the effects of working capital management on the profitability of 386 Tunisian export SMEs observed from 2001 to 2008. The results of fixed and random effects models show a negative relationship between corporate profitability and the different working capital components. This reveals that Tunisian export SMEs should shorten their cash conversion cycle by reducing the number of days of accounts receivable and inventories to increase their profitability.

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Section: Accounts Receivable and Corporate Profitabilitymentioning

confidence: 99%

Section: Variables Of the Analysismentioning

confidence: 99%

The Impact of Working Capital Management on Profitability: The Case of Small and Medium-Sized Export Companies in Tunisia

Bellouma

2011

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“…Those who decide on the terms in a trade credit contract are credit managers or sales personnel, assisted by a credit bureau to assess credit risk according to Pike and Cheng (2003). A credit bureau is a formal exchange mechanism of credit information by lenders.…”

Section: Information Use By Credit Managersmentioning

confidence: 99%

“…Cheng and Pike (2003) argue that industry standards determine credit terms for UK firms, though Gill (2012) finds that credit terms are largely determined by firm-specific factors. Klapper et al (2011) find that large, investment-grade buyers get long terms from small suppliers consistent with relatively untrusted suppliers extending longer terms to buyers to guarantee product quality.…”

Section: Information Use By Credit Managersmentioning

confidence: 99%

Who Uses Financial Reports and for What Purpose? Evidence from Capital Providers

Cascino

Clatworthy

Osma

et al. 2014

Accounting in Europe

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We review the academic literature on the use of financial reporting information by capital providers. We classify our findings by investor type and by information objective. While most capital providers use accounting information, our survey indicates that they do so in a variety of ways with financial reporting information competing with other sources of information. We also find that information intermediaries are influential in both credit and equity markets, making the identification of a typical target 'user' inherently difficult. Our main findings question the underlying objective of the Conceptual Framework to guide the development of standards for general-purpose financial statements to provide a typical knowledgeable investor with a true and fair view about the reporting entity. Finally, we identify gaps in the literature and suggest areas where future research can help inform important academic and policy debates.

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“…According to Jasiene and Laurinavicius (2009), usually, there are commodity and monetary forms of credit distinguished. Pike and Cheng (2001) describe trade credit as a process comprising the combined commodity-financial transaction. The authors believe that the exchange of goods (or services) is separated from the exchange of money in terms of time.…”

Section: Introductionmentioning

confidence: 99%

The Evaluation of Trade Credit Insurance in Lithuanian Business Market as a Credit Risk Management Tool

Lezgovko

Jakovlev

2017

Economics and Culture

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Abstract. In today's trade, the vast majority of commercial transactions in both domestic and international trade are concluded by applying trade credit terms. The aim of this article is to analyse the trade credit insurance and, according to the methodology, to evaluate it as a credit risk management tool in the context of Lithuanian business market. The authors have proposed a methodology that combines theoretical and practical research methods. First of all, with assistance of qualitative analysis, the alternative external credit risk management tools were examined. Such analysis allows not only to identify the advantages, disadvantages and benefits of researched risk management tools but also to assess the efficiency and rationality of trade credit insurance in the context of alternative methods. In order to carry out an assessment in the practical aspect, considering the lack of statistical data, it was decided additionally to perform an expert evaluation. After performing an assessment of trade credit insurance, it was concluded that in international trade, with a large buyer portfolio and high sales volume, the trade credit insurance becomes the most effective and rational way to manage credit risk, which eliminates the losses because of the debtor's insolvency or bankruptcy, manages countries and sector's risks and helps to discipline the debtor, what determines the decline in overdue accounts frequencies, amounts and volumes.

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Credit Management: An Examination of Policy Choices, Practices and Late Payment in UK Companies

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Cited by 76 publications

References 20 publications

The Impact of Working Capital Management on Profitability: The Case of Small and Medium-Sized Export Companies in Tunisia

The Impact of Working Capital Management on Profitability: The Case of Small and Medium-Sized Export Companies in Tunisia

Who Uses Financial Reports and for What Purpose? Evidence from Capital Providers

The Evaluation of Trade Credit Insurance in Lithuanian Business Market as a Credit Risk Management Tool

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