個案資料
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Joneja Bright Steels: The Cash Discount Decision
內容大綱
Joneja Bright Steels Private Limited (JBS) was one of many major players in India’s bright steel industry, serving almost every automobile manufacturer in Northern India. After the business launched in 2002, the automobile market expanded, leading JBS to an early strong position. But in fiscal year 2014/15, the company experienced working capital management issues. JBS considered using credit policies as a way of improving profitability—shifting from a strict credit policy of net 45 days to a flexible credit policy with a 2 per cent discount for accounts paid within 10 days (2/10 net 45 days). Should JBS implement a cash discount for fiscal year 2016/17? The discount could potentially increase the burden caused by already declining sales, but could also improve the company’s cash position.
學習目標
This case is ideal for use in graduate courses that examine various aspects of managing the working capital of a well-established organization involved in manufacturing activities, focusing on what effect a flexible credit policy has on the profitability of an organization. In the process of deciding whether to implement a cash discount for accounts receivable in a competitive situation, students will learn<ul><li> <br>to recognize the various elements of working capital in an organization and how these are related to the revenue realized;</li><li>the steps involved in calculating ratios related to working capital;</li><li>how to use a firm’s competitors for benchmarking; and</li><li>how to determine the valuation of a cash discount and how it can help improve the cash position and profitability of a firm.</ul></li>