You own a small business that produces high quality cut flowers. While you have many customers...

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Finance

You own a small business that produces high quality cut flowers.While you have many customers your largest buyer is Blooming SmartLtd, a large retail outfit with a national chain of outlets thataccounts for 50% of your orders on average. Blooming Smart Ltd hasnow requested that you extend credit terms to them better than whatyou offer to your other buyers.
How could this affect your operating cycle?
Do you see anything ethically wrong with what Blooming Smart istrying to do?
What would be your strategy(ies) in dealing with this?

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4.3 Ratings (637 Votes)

A The extension of credit terms to Blooming Smart Ltd means that they will be making the payment after the other customers have paid Since Blooming Smart accounts for 50 percent See Answer

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You own a small business that produces high quality cut flowers.While you have many customers your largest buyer is Blooming SmartLtd, a large retail outfit with a national chain of outlets thataccounts for 50% of your orders on average. Blooming Smart Ltd hasnow requested that you extend credit terms to them better than whatyou offer to your other buyers. How could this affect your operating cycle?Do you see anything ethically wrong with what Blooming Smart istrying to do?What would be your strategy(ies) in dealing with this?