Member Login
Journal Abstracts


Merchandise Details

If an item you purchase is a downloadable product, you will receive an email with instructions within a few minutes of purchase. 
Not all items are eligible for download.

The Implicit Cost of Trade Credit and Theory of Optimal Terms of Sale
Member Price$0.00
Non-Member Price$25.00
Merchandise Description

Downloadable Item

Credit managers will always be challenged to demonstrate the value of the credit operation to senior executives and shareholders. The credit function can and should be considered an enabler of sustainable Economic Value. The value of what you will learn in this publication will aid you in this process.


In today’s environment of extreme investment market scrutiny of corporate practices characterized by the EVA mentality, our credit policies need to be considered a key element in our strategy to maintain the sustainability of the return to investors. To the degree that we increase our own sustainability by investing in our customers’ businesses byway of providing easy access to trade credit, such credit may generate additional sustainable value, even though on the surface it appears to be “costly.”


This paper shows us (properly so) that design, maintenance and monitoring of optimal credit terms and policies should be conducted in the context of maximizing the ROE rather than minimizing the DSO. Making the DSO the principle focus and main target of your credit operation may lead to misguided and sub-optimal results.


Go to the primary CRF website:  

 | |  | © Copyright 2012

Disclaimer of Information:
Materials contained on this World Wide Website (" and it's associated pages") are for general information only and do not constitute legal, technical or business practice advice or recommendations. We do not undertake to update these materials to reflect subsequent legal, technical, business or other developments. You should not act upon any information contained in these materials without seeking your own professional legal, technical or business counsel.
The information and materials on this Site could include technical inaccuracies or typographical errors. Changes are periodically made to the information contained herein.

Links to Third Party Websites
The Credit Research Foundation may provide hyperlinks to third party websites as a convenience to users of this Site. Credit Research Foundation does not control third party websites and is not responsible for the contents of any hyperlinked third party websites or any hyperlink in a hyperlinked site. The Credit Research Foundation does not endorse, recommend or approve any third party website hyperlinked from this Site. The Credit Research Foundation shall have no liability to any entity for the content or use of the content available through such hyperlink.

© 2020 Community Brands Holdings, LLC. All rights reserved.