应收账款管理外文文献

应收账款管理外文文献

MANAGEMENTOFACCOUNTSRECEIVABLE

INACOMPANY

Abstract

Accountsreceivablemanagementdirectlyimpactstheprofitabilityofacompany.Firstly,thepurposeoftheempiricalpartofthestudyistoanalyzeaccountsreceivableandtodemonstrateacorrelationbetweentheaccountsreceivablelevelandprofitabilityexpressedintermsofRetunonAssets(ROA)ofsamplecompanies.Secondly,theaimoftheoreticalresearchistoexplorecostandbenefitsofchangesincreditpolicy,determinetheindependentvariableswhichhaveanimpactonnetsavingsandestablisharelationshipamongtheminordertodevelopanewmathematicalmodelforcalculatingnetsavingsfollowingarevisionofcreditpolicy.Onthebasisofresearchresult,amathematicalmodelforcalculatingnetsavingsandfollowingarevisionofcreditpolicy,hasbeendevelopedandwiththismodelacompanycanconsiderdifferentcreditpoliciesaswellaschangesincreditpolicyinordertoimproveitsincomeandprofitabilityandestablishacreditpolicythatresultsinthegreatestnetprofitability.Keywords:accountsreceivable,profitability,netsavings,creditpolicy

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EKON.MISAOPRAKSADBK.GODXXII.(2013.)BR.1.(21-38)Kontus,E.:MANAGEMENTOFACCOUNTS...1.INTRODUCTION

Accountsreceivableisthemoneyowedtoacompanyasaresultofhavingsolditsproductstocustomersoncredit.Theprimarydeterminantsofthecompany,sinvestmentinaccountsreceivablearetheindustry,theleveloftotalsalesalongwiththecompany,screditandthecollectionpolicies.

Accountsreceivablemanagementincludesestablishingacreditandcollectionspolicy.

Creditpolicyconsistsoffourvariables:creditperiod,discountsgivenforearlypayment,creditstandardsandcollectionpolicy.Thethreeprimaryissuesinaccountsreceivablemanagementaretowhomcreditshouldbeextended,thetermsofthecreditandtheprocedurethatshouldbeusedtocollectthemoney.

Themajordecisionregardingaccountsreceivableisthedeterminationoftheamountandtermsofcredittoextendtocustomers.Thetotalamountofaccountsreceivableoutstandingatanygiventimeisdeterminedbytwofactors:thevolumeofcreditsalesandtheaveragelengthoftimebetweensalesandcollections.Thecredittermsofferedhaveadirectbearingontheassociatedcostsandrevenuetobegeneratedfromreceivables.Ifcredittermsaretight,therewillbelessofaninvestmentinaccountsreceivableandfewerbaddebtlosses,buttherewillalsobelowersalesandreducedprofits.

Wehypothesizethatbyapplyingscientifically-basedaccountsreceivablemanagementandbyestablishingacreditpolicythatresults

inthehighestnetearnings,companiescanearnasatisfactoryprofitaswellasareturnoninvestment.

Thepurposeofthisstudyistodeterminewaysoffindinganoptimalaccountsreceivablelevelalongwithmakingoptimumuseofdifferentcreditpoliciesinordertoachieveamaximumreturnatanacceptablelevelofrisk.Instrivingtofillinthegapsrelatingtonetsavingsfromchangesincreditpolicy,thestudymakesitsowncontributiontoresearchandtherebytomanagersbygivingthemgeneralrecommendation.Withtheaimofcompletingthesegaps,thestudywillinvestigateaccountsreceivables,theirmanagementandexplorecostsandbenefitsfromchangesincreditpolicyaswellasnetprofitability.

Whenacompanyisconsideringchangesinitscreditpolicyinordertoimproveitsincome,incrementalprofitabilitymustbecomparedwiththecostofdiscountandtheopportunitycostassociatedwithhigherinvestmentinaccountsreceivable.

Theoutcomerepresentsanewmathematicalmodelforcalculatingnetsavingsfromchangesincreditpolicyandwiththismodelacompanycanconsiderdifferentcreditpoliciesaswellaschangesincreditpolicyinordertoimproveitsincomeandprofitability.

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EKON.MISAOPRAKSADBK.GODXXII.(2013.)BR.1.(21-38)Kontus,E.:MANAGEMENTOFACCOUNTS...2.LITERATUREREVIEW

Accountsreceivablemanagement

Accountsreceivablerepresentsasizablepercentageofmostfirmsassets.Investmentsinaccountsreceivable,particularlyformanufacturingcompanies,representasignificantpartofshort-termfinancialmanagement.Firmstypicallysellgoodsandservicesonbothcashandacreditbasis.Firmswouldrathersellforcashthanoncredit,butcompetitivepressuresforcemostfirmstooffercredit.Theextensionoftradecreditleadstotheestablishmentofaccountsreceivable.Receivablesrepresentcreditsalesthathavenotbeencollected.Asthecustomerspaytheseaccounts,thefirmreceivesthecashassociatedwiththeoriginalsale.Ifthecustomerdoesnotpayanaccount,abaddebtlossisincurred

Whenacreditsaleismade,thefollowingeventsoccur:inventoriesare.reducedbythecostofgoodssold,accountsreceivableareincreasedbythesalesprice,andthedifferenceisprofit,whichisaddedtoretainedearnings.Ifthesaleisforcash,thenthecashfromthesalehasactuallybeenreceivedbythefirm,butifthesaleisoncredit,thefirmwillnotreceivethecashfromthesaleunlessanduntiltheaccountiscollected.Carryingreceivablehasbothdirectandindirectcosts,butitalsohasanimportantbenefit-increasedsales.

AccordingtoChambersandLaceytherearethreeprimaryissuesinthe

managementofaccountsreceivable:towhomtoextendcredit,whatthetermsofthecreditshouldbe,andwhatprocedureshouldbeusedtocollectthemoney.Extendingcreditshouldbebaseduponacomparisonofcostsandbenefits.Theanalysismustbuildinuncertaintybecauseweareuncertainoffuturepayment,andwewillhandlethisbycomputingtheexpectedcostsandexpectedbenefitsthroughpaymentprobabilities.Thepotentialcostofextendingcreditisthatthecustomerwillnotpay.Althoughthereisatemptationtocomputethiscostasthefullpriceoftheproduct,itisalmostalwaysmoreappropriatetousetheactualcostoftheproduct.Thepotentialbenefitofextendingcreditisnotjustthehopeforprofitontheonetransaction;rather,itisthepotentialvalueofthecustomerforalong-termrelationship.

Thedecisionofhowmuchcredittooffermustbemadewhenthecustomerinitiallyrequestscreditandwhenthecustomerrequestsadditionalcredit.Thefundamentalprinciplethatguidesfinancialdecisionscanbeused:marginalbenefitversusmarginalcost.Themarginalcostistheadditionalpotentiallostcostsoftheproduct.Thecostsofpastuncollectedsalesaresunkcostsandshouldnotbeincludedasamarginalcosts.Themarginalbenefitsarethepotentialsalesand1Pinches,G.:FinancialManagement,HarperCollinsCollegePublishers,NewYork,1994.,p.701-702.2Chambers,D.R.,Lacey,N.L.:ModernCorporateFinance,HaydenMcNeilPublishing,Michigan,2011,p.518.

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EKON.MISAOPRAKSADBK.GODXXII.(2013.)BR.1.(21-38)Kontus,E.:MANAGEMENTOFACCOUNTS...interestrevenues-includingthepotentialtorecoverpastsalesthatremain3uncollected.

Oncethedecisiontograntcredithasbeenmade,thefirmmustestablishthetermsofthecredit.Credittermsareoftenseparatedintotwoparts:thecreditperiodandthecreditdiscount.

Collectionofaccountsreceivableisanimportantprocessforacorporationandrequiresawell-designedandwell-implementedpolicy.Onetechniqueisthefactoringofaccountsreceivables.Inatypicalfactoringarrangement,onefirmwillselltheiraccountsreceivableoutrighttoanotherfirmforanagreed-uponprice.Thereiausuallynorecourseinsuchtransactions,suchthatthebuyer(alsoknownasthefactor)takesthelossifthepurchaserofthegoodsdoesnotultimatelypayforthem.

Anothertechniquetoexpeditethereceiptofaccountsreceivableistoutilizelockboxes.Lockboxesarepaymentcollectionlocationsspreadgeographicallysoastoreducetheamountoftimerequiredforchecksmailedtothefirmtobedepositedandcleared.Thelockboxesaretypicallypostofficeboxaddressesfromwhichdepositsgodirectlytoabankonthedayofreceipt.Thereductionofmailingtimeandcheckclearingtimeforthebankscanproducesignificantsavingswhenlargesumsofmoneyareinvolved.

Paymentsofaccountsreceivableshouldbecloselymonitoredtodetectpotentialproblemssuchaswouldbeindicatedbyslowpayments.Followinguponslow-payingcustomersisanimportantfunctionofthecreditdepartment.Proceduresshouldbecarefullydevelopedandconsistentlyimplemented4.

Themajordecisionregardingaccountsreceivableisthedeterminationoftheamountandtermsofcredittoextendtocustomers.Thetotalamountofaccountsreceivableisdeterminedbytwofactors:thevolumeofcreditsalesandtheaveragelengthoftimebetweensalesandcollections.Thecredittermsofferedhaveadirectbearingontheassociatedcostsandrevenuetobegeneratedfrom

receivables.Inevaluatingapotentialcustomer'sabilitytopay,considerationshouldbegiventothefirm'sintegrity,financialsoundness,collateraltobepledged,andcurrenteconomicconditions.Acustomer'screditsoundnessmaybeevaluatedthroughquantitativetechniquessuchasregressionanalysis.Baddebtlossescanbeestimatedreliablywhenacompanysellstomanycustomersandwhenitscreditpolicieshavenotchangedforalongperiodoftime.Inmanagingaccountsreceivable,thefollowingproceduresarerecommended:

establish acredit policy

establish apolicy concerning billing

establish apolicy concerning collection.

Ibidem, p.520.4Ibidem,p.521-522 .

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Theestablishmentofacreditpolicycanincludethefollowingactivities:

Adetailedreviewofapotentialcustomer'ssoundnessshouldbemade

priortoextendingcredit.Proceduressuchasacarefulreviewofthe

customer'sfinancialstatementsandcreditrating,aswellasareviewof

financialservicereportsarecommon.

Ascustomerfinancialhealthchanges,creditlimitshouldberevised.

Marketingfactorsmustbenotedsinceanexcessivelyrestrictedcredit

policywillleadtolostsales.

Thepolicyisfinanciallyappropriatewhenthereturnontheadditional

salesplustheloweringininventorycostsisgreaterthantheincremental5costassociatedwiththeadditionalinvestmentinaccountsreceivable.

Thefollowingproceduresarerecommendedinestablishingapolicyconcerningbilling:

Customerstatementsshouldbesentwithin1daysubsequenttotheclose

oftheperiod.

Largesalesshouldbebilledimmediately.

Customersshouldbeinvoicedforgoodswhentheorderisprocessed

ratherthanwhenitisshipped.

Billingforservicesshouldbedoneonaninterimbasisorimmediately

priortotheactualservices.Thebillingprocesswillbemoreuniformif

cyclebillingisemployed.

Theuseofseasonaldating'sshouldbeconsidered.

Inestablishingapolicyconcerningcollectionthefollowingproceduresshouldbeused:

Accountsreceivableshouldbeagedinordertoidentifydelinquentand

high-riskcustomers.Theagingshouldbecomparedtoindustrynorms.

Collectioneffortsshouldbeundertakenattheveryfirstsignofcustomer6financialunsoundness.

Managingthecreditpolicy

Thesuccessorfailureofabusinessdependsprimarilyonthedemandforitsproducts.

5Shim,J.K.,Siegel,J.G.:FinancialManagement,Thirdedition,McGrawHill,NewYork,2007,p.107-108.6Ibidem,p.108.

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Themajordeterminantsofdemandaresalesprices,productquality,advertising,andthecompany'screditpolicy.Thefinancialmanagerisresponsibleforadministeringthecompany'screditpolicy.Receivablesmanagementbeginswiththecreditpolicy.Creditpolicyconsistsoffourmajorcomponents:creditstandards,creditterms,thecreditlimitandcollectionprocedures.

Creditstandardsrefertotherequiredfinancialstrengthofacceptablecreditcustomers.

Basedonfinancialanalysisandnonfinancialdata,thecreditanalystdetermineswhethereachcreditapplicantexceedsthecreditstandardandthusqualifiesforcredit.Lowercreditstandardsboostsales,butalsoincreasebaddebts.Theminimumstandardsacustomermustmeettobeextendedcreditare:character,capital,capacity,conditionsandcollateral.

Thecreditperiod,stipulatinghowlongfromtheinvoicethecustomerhastopay,andthecashdiscounttogethercomprisetheseller'screditterms.Acompany'scredittermsareusuallyverysimilartothatofothercompaniesinitsindustry7.

Discountsgivenforearlypaymentincludethediscountpercentageandhowrapidlypaymentmustbemadetoqualifyforthediscount.

Ifcreditisextended,thedollaramountthatcumulativecreditpurchasescanreachforagivencustomerconstitutesthatcustomer'screditlimit.Thecustomerperiodicallypaysforcreditpurchases,freeingupthatamountofthecreditlimitforfurtherorders.Thetwoprimarydeterminantsoftheamountofacustomer'screditlimitarerequirementsforthesupplier'sproductsandtheabilityofthe

customertopayitsdebts.Thelatterfactorisbasedprimarilyonthecustomer'srecentpaymentrecordwiththesellerandothersandareviewandanalysisofthecustomer'smostrecentfinancialstatements

Detailedstatementsregardingwhenandhowthecompanywillcarryout.collectionofpast-dueaccountsmakeupthecompany'scollectionprocedures.Thesepoliciesspecifyhowlongthecompanywillwaitpasttheduedatetoinitiatecollectionefforts,themethodsofcontactwithdelinquentcustomers,andwhetherandatwhatpointaccountswillbereferredtoanoutsidecollectionagency.

Collectionpolicyismeasuredbyitstoughnessorlaxityinattemptingtocollectonslow-payingaccounts.Atoughpolicymayspeedupcollections,byitmightalsoangercustomers,causingthemtotaketheirbusinesselsewhere.

7Maness,T.S.,Zietlow,J.T.:Short-TermFinancialManagement,ThirdEdition,ThomsonSouth-Western,Ohio,2005,p.139.8Ibidem,p.139.9Ibidem,p.141.10Brigham,E.F.,Daves,P.R.:IntermediateFinancialManagement,8thedition,ThomsonSouth-Western,Ohio,2004.,p.715.

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Afirmmayliberalizeitscreditpolicybyextandingfullcredittopresentlylimitedcreditcustomersortonon-creditcustomers.Fullcreditshouldbegivenonlyifnetprofitabilityoccurs.Afinancialmanagerhastocomparetheearningsonsalesobtainedtotheaddedcostofthereceivables.Theadditionalearningsrepresentthecontributionmarginontheincrementalsalesbecausefixedcostsareconstant.Theadditionalcostsontheadditionalreceivablesresultfromthegreaternumberofbaddebtsandtheopportunitycostoftyingupfundsinreceivablesforalongertimeperiod.

Ifafirmconsidersofferingcredittocustomerswithahigher-than-normalriskrating,theprofitabilityonadditionalsalesgeneratedmustbecomparedwiththeamountofadditionalbaddebtsexpected,higherinvestingandcollectioncosts,andtheopportunitycostoftyingupfundsinreceivablesforalongerperiodoftime.Whenidlecapacityexists,theadditionalprofitabilityrepresentstheincrementalcontributionmargin(saleslessvariablecosts)sincefixedcostsremainthesame.

RESEARCH

Methodology

ThispaperpresentsresultsfromtheempiricalresearchundertakenonarepresentativesampleofCroatiancompanieswiththeaimofexploringtheirreceivables,accountsreceivablesand,finally,explorechangesincreditpolicyespeciallycostsandbenefitsaswellasnetprofitabilityfromchangesincreditpolicy.

TheempiricalresearchwasbasedonasampleofrandomlyselectedcompaniesintheRepublicofCroatia.Theanalyzedsamplecomprises60largecompaniesand60medium-sizedcompanies.

WeanalyzedthestructureofreceivablesusedbysamplecompaniesintheRepublicofCroatiain2010,accountsreceivableratiosalongwithadependencebetweenaccountsreceivablelevelsandprofitability.Usingmethodsfromstatistics,weinvestigatedwhethertherewasarelationbetweenaccountsreceivableratiosandprofitabilityexpressedintermsofreturnonassets.Toimprovethequalityofanalysisanddescriptivestatisticsanalysis,weusedfinancialratios.

Ourbodyofdataincludes:receivableslevels,accountsreceivabledividedbycurrentassets,accountsreceivabledividedbytotalassetsandReturnonAssets(ROA).

Wealsoanalyzedcostsandbenefitsfromchangesincreditpolicyaswellasnetearningsfromchangesincreditpolicy.Theindependentvariableswhichdeterminenetearningsfromrevisingthecreditpolicyhavebeenselectedandtherelationsbetweenthemhavebeendefined.Onthebasisofresearchresults,we27

EKON.MISAOPRAKSADBK.GODXXII.(2013.)BR.1.(21-38)Kontus,E.:MANAGEMENTOFACCOUNTS...haveintroducedanewmodelforcalculatingnetearningsfromchangesincreditpolicywhichisasystemofmathematicalequations.

Resultsofanalysis

Weanalyzedthestructureofreceivablesusedbysamplecompaniesin2010,accountsreceivableratiosalongwithadependencebetweenaccountsreceivablelevelsandprofitabilityaswellaschangesincreditpolicy.3.2.1.StructureofreceivablesusedbyCroatiancompanies

Thestructureofreceivablesinsamplecompaniesin2010hasbeenanalyzedandpresentedinTable1.

Table1

StructureofreceivablesinCroatiancompaniesin2010

(in000kuna)

CompanyLarge%Medium-sized%

Receivablescompaniescompanies

Receivablesfromrelated1.830.931,1017,5575.853,347,97parties

Accountsreceivables7.134.284,1368,37681.804,0471,62Receivables

from24.579,020,249.139,850,96employeesand

shareholders

Receivablesfrom498.062,564,7747.780,245,02governmentandother

institutions

Otherreceivables946.220,109,07137.323,1514,43Totalreceivables10.434.076,91100,00951.900,62100,00Source:Author'scalculations

Analysingthestructureofreceivablesofsamplelargeandmediumsizedcompaniesitcanbeseenthattheymainlyinvestinaccountsreceivables.Theshareofaccountsreceivablesintotalreceivablesisthehighestanditamountsto68,37%oftotalreceivablesforlargecompaniesand71,62%formedium-sizedcompaniesunderreview.

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EKON.MISAOPRAKSADBK.GODXXII.(2013.)BR.1.(21-38)Kontus,E.:MANAGEMENTOFACCOUNTS...

Thesharesofreceivablesfromrelatedparties,receivablesfromemployees,receivablesfromgovernmentandotherinstitutionsaswellasotherreceivablestogetheramountto31,63%oftotalreceivablesforlargecompaniesand28,38%formedium-sizedcompaniesunderreview.Thefundsinvestedinagivenreceivablecategorymaychangedaily,andrequireclosescrutiny.Asthesharesofthesereceivablesamountto0.24%to17.55%oftotalreceivablesforsamplelargecompaniesandfrom0.96%to14.43%forsamplemedium-sizedcompanies,considerationshouldbegiventothecompany,saccountsreceivablesandtheirmanagement.

AnalysisofaccountsreceivablesusedbyCroatiancompanies

Investmentsinaccountsreceivablesinsamplelargeandmedium-sizedcompaniesin2010havebeenanalyzedbyusingfinancialindicatorsandpresentedinTable2.

Table2

AccountsreceivableratiosofCroatiancompaniesin2010

LargeMedium-sized%CompaniesRatio%companiescompanies

Accountsreceivable/

currentassetsratio

Upto10%1220,00915,00Between10and20%12813,3320,00Between20and30%1321,672033,33Between30and40%813,33610,00Between40and50%711,6735,00

16,67Over50%1220,0010

Total60100,0060100,00Accountsreceivable/total

assetsratio

Upto10%4066,673558,33Between10and20%813,331220,00

Between20and30%46,67 711,67Between 30 and40%58,33 46,67

Between40and50%23,33 00,00

12Over50%1,673,33 Total60100,00 60 100,00Source: Author's

calculations

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Themostsurveyedlargecompanies(21,67%)andmedium-sizedcompanies(33,33,%)haveashareofaccountsreceivableincurrentassetsbetween20and30%.

Theshareofaccountsreceivableincurrentassetsamountsto10%for20%ofsurveyedlargecompaniesandfor15%ofsurveyedmedium-sizedcompanies.

Theshareofaccountsreceivableincurrentassetsamountstobetween10to20%for13,33%ofsurveyedlargecompaniesandfor20%ofsurveyedmedium-sizedcompanies.

Consequently,theshareofaccountsreceivableincurrentassetsamountsto30%for55%ofsurveyedlargecompaniesandfor68,33%ofsurveyedmedium-sizedcompanies.

Themostsurveyedlargecompanies(66,67%)andmedium-sizedcompanies(58,33,%)haveashareofaccountsreceivableintotalassetsupto10%.Theshareofaccountsreceivableintotalassetsamountsto

20%for80%ofsurveyedlargecompaniesandfor78,33%ofsurveyedmedium-sizedcompanies.

Theloweraccountsreceivableratiosmayindicatethataverageinvestmentinaccountsreceivableisunsuitableandthecompany,screditpolicyistoostringent,withthecompanyfailingtotapintothepotentialforprofitthroughsalestocustomersinhigherriskclasses.Astringentcreditpolicymightresultinalossofbusiness.

Investmentinaccountsreceivablerepresentsthecosttiedupinthosereceivables,includingboththecostoftheproductandthecostofcapital.Beforerevisingitscreditpolicy,acompanyhastoweightheprofitpotentialagainsttheriskinherentinsellingtomoremarginalcustomers.Theprofitabilityonadditionalsalesgeneratedmustbecomparedwiththeamountofadditionalbaddebtsexpected,higherinvestmentandcollectioncosts,alongwiththeopportunitycostoftyingupfundsinreceivablesforalongerperiodoftime.

Relationbetweenaccountsreceivablelevelandprofitability

Weinvestigatedwhethertherewasarelationbetweentheaccountsreceivablelevel,whichcomparedaccountsreceivabletocurrentassets,andprofitabilityandanalyzedthedependencebetweenaccountsreceivablelevelandprofitability.Wehypothesizethattheremaybeapositivecorrelationamongthemcoupledwiththefactthatanincreaseofaccountsreceivabletriggersanincreaseofprofitabilityexpressedintermsofreturnonassets.

Thelevelofaccountsreceivablesexpressedintermsofratiosandreturnonassetsinlargeandmedium-sizedsamplecompaniesintheRepublicofCroatiain2010hasbeenanalyzedasseeninTable3.

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Table3DescriptivestatisticsofaccountsreceivableratioandreturnonassetsinCroatian

companiesin2010

LargeMedium-sizedCompaniescompaniescompanies

Accountsreceivable/currentassetsratio

Arithmeticmean25,5123,09

18,7719,69Standarddeviation

73,5885,28Coefficientofvariation

Returnonassets

Arithmeticmean0,030,02

Standarddeviation0,080,06

Coefficientofvariation278,23326,82

Correlationcoefficient0,340,44

Source:Author,scalculations

Theaveragevalueofaccountsreceivable/currentassetsratioforlargecompaniesduringtheobservedperiodis25,51,whiletheaveragevalueofReturnOnAssets(ROA)is0.03.Thestandarddeviationofaccountsreceivable/currentassetsratioforlargecompanies(18,77)ishighercomparedtothestandarddeviationofROA(0,08).

Thelargeststandarddeviationhasbeennotedwiththeaccountsreceivable/currentassetsratioforlargecompaniesandshowshowwidelymembersofarelatedgroupdivergefromtheaverage.CoefficientofvariationforROAis278,23andshowsthatarelativedispersionissignificant.CoefficientofvariationforROAishigherthanforaccountsreceivable/currentassetsratioandshowsthatthevariabilityofROAishigherthanthevariabilityofaccountsreceivable/currentassetsratioforlargecompanies.Thecorrelationcoefficientforlargecompaniesis0,34whichconfirmsthatthecorrelationbetweenaccountsreceivable/currentassetsratioandROAispositiveandweak.Thepositivecorrelationbetweenvariablesaccountsreceivable/currentassetsratioandROAmaybeanindicationthatachangeintheaccountsreceivablelevelisassociatedwithanequivalentchangeinthevalueofthereturnonassets.

Theaveragevalueofaccountsreceivable/currentassetsratioformedium-sizedcompaniesduringtheobservedperiodis23,09,whiletheaveragevalueofReturnOnAssets(ROA)is0,02.Thestandarddeviationofaccountsreceivable/currentassetsratioformedium-sizedcompanies(19,69)ishighercomparedtothestandarddeviationofROA(0,06).

Coefficientofvariationforreturnonassetsis326,82andshowsthatarelativedispersionisgreat.Thecoefficientofvariationforaccountsreceivable/currentassetsratioislowerthancoefficientofvariationforROAandshowsthatconsistencyofaccounts

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EKON.MISAOPRAKSADBK.GODXXII.(2013.)BR.1.(21-38)Kontus,E.:MANAGEMENTOFACCOUNTS...receivable/currentassetsratioishigherthanconsistencyofROAformedium-sizedcompanies.Thecorrelationcoefficientformedium-sizedcompaniesis0,44whichconfirmsthatthereturnonassetsiscorrelatedpositivelyandweaklywiththeaccountsreceivable/currentassetsratio,thussuggestingthatanincreaseinthelevelofaccountsreceivabletriggersanincreaseinreturnonassets.

ThepositivecorrelationbetweenvariablesaccountsreceivableandROAmeansthatasvaluesofaccountsreceivableexpressedintermsofaccountsreceivable/currentassetsratioincrease,thevaluesonthereturnonassetstendtoincreaseinapredictablemanner.

Weconfirmthatduringtheobservedperiodthecorrelationbetweenvariablesaccountsreceivableexpressedintermsofaccountsreceivable/currentassetsratioandreturnonassetsforCroatiansamplecompaniesispositiveandanincreaseinthelevelofaccountsreceivabletriggersanincreaseofprofitabilityexpressedintermsofreturnonassets.

Accountsreceivablemanagementdirectlyimpactontheprofitabilityofthecompany.Inaccountsreceivablemanagement,afinancialmanagershouldconsiderthatthereisaopportunitycostassociatedwithholdingreceivablebalances.Asthecredittermsofferedhaveadirectbearingontheassociatedcostsandrev