Imagine that you are the owner/manager of a small business.
- What kind of business are you in?
- What kind of credit policy will you implement and why? What do you think your collection period will be? Explain your reasoning.
- Will you buy from suppliers on credit? What do you think your payables deferral period will be? Explain your reasoning.
- 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?