Credit Evaluation Criteria

In the Credit Evaluation, the 5 Cs that should be considered are:

Capital: Ability to pay
Character: Willingness to pay
Capacity: Ability to turn business into profit
Condition: Business and trading environment
Collateral: Guarantee available

Evaluation Criteria	Measurement
Capital	Cash availability Quick Asset ratio Average debtors day Credit facilities
Character	Average creditors day Directors of the company
Capacity	Net profit before tax ratio No of years trading
Condition	Nature of business activities
Collateral	Legal constitution Guarantee

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March 23, 2006 Tags: Credit control, Credit management, documents Posted in: CREDIT MANAGEMENT/CONTROL

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