Natalie will use the financial statement to measure the shop's financial health and earnings potential. Natalie should perform a ratio analysis since it will demonstrate the relationship between different financial statement reports. Curtis' creditor's duration will be of interest. This will assist her in assessing Curtis's ability to pay his creditors quickly. The quick ratio would tell her if Curtis' company has enough assets to cover all of his liabilities. To obtain more detail, the questions to ask are explanatory. Credit-related questions should be asked. Natalie would have a good view of Curtis's financial health based on the ratios she has analyzed. She will decide whether to pursue the credit selling risk or not based on the details.
Natalie should think about offering a cash discount instead of extending credit. Curtis should give a certain amount on the day of purchase for the mixer. If this isn't reached, she should give a second discount on top of the first. Curtis should be given a double deal only if he pays within a certain number of days, but not more than 30. As a result of this, Natalie would be able to reduce the risks associated with credit sales.
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Credit cards are widely accepted and widely available in a variety of trade outlets. As a result, a business that accepts credit cards will benefit from increased sales, as more customers are moving away from cash transactions these days. Credit cards, despite their apparent advantages, have significant disadvantages. The company's operating costs will rise as a result of the many fees it will be paying. The high costs would also be due to the increased number of reconciliations needed, necessitating a larger workforce. And finally, credit cards are a potential source of fraud and a security risk.
