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How to set/ determine Credit limit of a customer in
Manufacturing and Trading Business?



How to set/ determine Credit limit of a customer in Manufacturing and Trading Business?..

Answer / sat

We could determiine the credit limit by analysing the credit worthiness of the customer (i.e debt equity analysis) by analysing the debt equity position is he/she is viable assets to met his debt. Based on that we could fix credit limit. ( debt/equity should 2:1)

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