RE: ::: vuaskari.com ::: FIN622 1ST GDB DISCUSS here frnds

RTL should negotiate with the vendors to enhance payment period as 50 days or above. Or

RTL should increase its sale volume to gain maximum profit and this profit should not distribute among shareholders and should cover the payment gap with vendors.

 

(It's my point of view)

 

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From: vuaskari_com@googlegroups.com [mailto:vuaskari_com@googlegroups.com] On Behalf Of Shazia Bhatti
Sent: Monday, October 22, 2012 10:12 AM
To: vu-star-angels@googlegroups.com; vu-study-corner@googlegroups.com; vuaskari_com@googlegroups.com; pak-youth@googlegroups.com
Subject: ::: vuaskari.com ::: FIN622 1ST GDB DISCUSS here frnds

 

Discussion Question

Regional Textile Limited (RTL) purchases raw material from various vendors with an average payment period of 45 days. Most of the sales are on credit and average collection period is 50 days.  There is a gap between the cash collection and payment as the management is unable to recover debts within 45 days.

Required

What measures can be taken by RTL to reduce the above stated gap ?

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