But at the same time, pushing the term COD may not be also advisable because it also too risky on the part of the customer who doesn’t have immediate money to pay and would stop buying from the company. So, it’s manner of efficient and effective possible credit policy that would the collection of the firm will be improve that would not too restrictive and liberal on the part of the customer.
Yes, because a projection of over $1.2 million of new equity capital would lower the firm’s debt ratio which result a decrease also in creditor’s risk exposure and gives a good capital relationship between the two.