CHAPTER ONE
INTRODUCTION
1.1 Background to the study
There is no doubt that credit management is central to the liquidity of firms; especially manufacturing firms which maintain high volume of working capital. Credit management can simply be regarded as written guidelines that set the terms and conditions for supplying goods on credit, customer qualification criteria, procedure for making collections and steps to taken in case of customer delinquency (Taiwo and Abayomi, 2013). Credit is a major marketing tool or weapon that firms commonly employ for the sole purpose of expanding sales. It therefore, implies that credit sales or extension to customer needs to be properly monitored and managed. Irrespective of the company’s share of the market and also the demand for its products, it there are no adequate measure put in place to regulate sales made to the firms’ customers on credit, then there could be problem more especially those problems related to liquidities (Taiwo and Abayomi, 2013). Liquidity is the ability of the firm to convert assists into cash. A firm’s liquidity is also referred to as short-term solvency. According to Taiwo and Abayomi (2013), the liquidity of a business firm is usually of particular interest to its short-term creditors since the liquidity of the firm measures its ability to pay those creditors. Dina (2007) suggests that good credit management is vital to business cash flow to ensure business operations. He opined further that credit management provides a firm the potential for growth. Similarly, Peter (2005) point out that there is a positive correlation between credit management and profitability. To the best of our knowledge, the impact of credit management on manufacturing companies’ liquidity has actually not gain empirical evidences or ascendancy in Nigeria. Against this background, this study attempts to empirically examine credit management and liquidity of manufacturing companies in Nigeria.
1.2 Statement of the research problem
A lot of studies have been conducted to establish the impact of credit management on firms’ liquidity. Dina (2007) argued that it appears that customers who pay promptly are not problems but those who cannot pay or would not pay. Invariable unpaid debts will affect profitability and liquidity. If repayments are not made regularly as a result of poor controlling, monitoring and collection of debts, then the ability to make profit is severely affected and it is believed that inefficient credit management generates irregular incomes which hinder the organization’s effectiveness, efficiency and liquidity (Aboagye, Adjei, Amponfi, Abona and Alhassan, 2013). Further study conducted by Michael, (1997) concluded that, about 38% of businesses that extent credit to clients is unlikely to sustain in the market. Michael asserted that it is possible to be profitable on paper but lack the cash to continue operating the business
MarcosHar says
generic tadalafil 40 mg: http://tadalafilonline20.com/ tadalafil pills
JasonAllop says
buy prescription drugs online without: https://genericwdp.com/ buy prescription drugs
JasonAllop says
usa pharmacy india pills without a doctor prescription
Jasontuppy says
cost of viagra where to buy viagra online
how much is viagra
Jasontuppy says
buy viagra online canada viagra from india
how much is viagra
Jasontuppy says
where to buy viagra buy viagra online usa
buy viagra online canada
Jasontuppy says
where can i buy viagra over the counter best over the counter viagra
where to buy viagra online
Michaelsax says
https://aralenph.com/ – where to buy chloroquine
viagra without doctor prescription
Michaelsax says
http://valtrex10.com/ – valtrex 500mg coupon
herbal ed
Kevinjaima says
mexican viagra https://viagrapills100.com/ viagra online usa
Kevinjaima says
price of viagra https://viagrapills100.com/ buy generic 100mg viagra online
TerrynuB says
buy ed pills ed drug comparison
medications list
TerrynuB says
buy ed drugs buy ed pills
cheap ed pills
PeterGussy says
http://prednisonest.com/# prednisone 20mg for sale
PeterGussy says
http://gabapentinst.com/# can you buy neurontin over the counter
PeterGussy says
https://hydroxychloroquinest.com/# plaquenil eye
PeterGussy says
http://gabapentinst.com/# neurontin 202
PeterGussy says
https://gabapentinst.com/# neurontin price south africa
PeterGussy says
https://gabapentinst.com/# neurontin 600 mg
RafaelCof says
https://zithromaxproff.com/# zithromax cost uk
zithromax 500 mg lowest price drugstore online
RafaelCof says
https://zithromaxproff.com/# zithromax 500mg
can you buy zithromax over the counter in canada
Michaelcib says
india pharmacies shipping to usa: meds from india online medications from india
RobertArten says
kamagra pills: https://edpillsonline24.com/# order erectile dysfunction pills
RobertArten says
male erectile pills: https://edpillsonline24.com/# cialis pills
DaniloRab says
local milfs
free local personals
RobertArten says
pills for erectile dysfunction: https://edpillsonline24.com/# over the counter ed medication
Timothytus says
free personals
free local singles
MichaelRUSSY says
viagra no prescription: non prescription viagra viagra without a doctor prescription canada
Timothytus says
free datingwebsites
best online dating sites