Talk on Credit Analysis-1

In this time of recession and down market it’s question for all about their credit and their credit points. I like to talk on credit analysis today. I like to talk with reference to business community as we all notice that banks and financial institutes giving credit even to people with bad credit report. People are having debt and credit card debt. No Company does blindly sell on credit to every customer approaching it.

 

The company has to evaluate the capability of the customer and his strengths to fulfill the promise of paying the bills in time. The companies ignoring adequate analysis of their customer would soon find themselves in a situation not generating sufficient resources for day to day operation of the business. The company must analyze the risk of paying late or risk of default before extending credit. The credit analysis would broadly involve the following three steps.  

1. Getting financial and non financial information about the customer. 
2. Analyzing the credit worthiness of the customer and assessing the risk involved. 
3. Deciding to grant the credit.  

The analysis of credit worthiness begins with the assessment of the customer’s willingness to pay the bills of the company. Capacity is the ability of the customer to meet the obligations whenever they are due. Debt negotiation and debt settlement helps company to finalize capacity of customers. In this regard it would be important for the company to see that the obligations are met through the funds generated from the operations of the customer. 

 

In additional to setting the credit standards, credit period, and cash discount policy, it is also important for the company to design the collection policy and procedures so as to speed up the collections as and when become due. What would the company do if the customers do not pay within the set credit period? In this regard the company has to assess the chances of collecting the accounts receivable by putting some effort. If by putting small effort the chance are that the customer will pay his bill are high then the company should go ahead with that much of effort.

                                                                       

India, Russia to hold naval wargames in Indian Ocean

Good Morning Friends, Last working day of the week. Over busy schedul for today. let’s see how the day end with tragets and achievement. With past few days events in Indian Ocean, India and Russia to hold naval wargames in Indian Ocean. Read the full news below i found on PTI.

With India and Russia bolstering their naval armada in the Gulf of Aden, the two countries would hone in on anti sea-piracy operations in the upcoming INDRA-2009 joint naval exercise in the Indian Ocean in January next year. “A task force from the Pacific Fleet, led by the Varyag missile cruiser, will leave Vladivostok in December and set sail for the Indian Ocean to participate in joint drills with the Indian navy,” Fleet spokesman Capt 1st Rank Roman Martov was quoted as saying by RIA Novosti.

This is the fourth such exercise since 2003 under the inter-services cooperation agreement between the two countries. New Delhi and Moscow held complex wargames in the sea of Japan last year.

Another naval task force of the Russian Northern Fleet led by the ‘Pyotr Veliky’ (Peter-the-Great) nuclear-powered missile cruiser also known as ‘killer of aircraft carriers’, will also join the wargames. Besides counter-piracy, maritime law, counter-terrorism, and anti drug smuggling would be other features of the joint exercise.

The exercises are being held in the backdrop of steep rise in incidents of sea-piracy off the Somali coast and in the Gulf of Aden. Both India and Russia have a naval presence in the waters.