Category: Credit Industry

Latest Credit Industry News from CCR, for Credit Professionals

 
   
CCRNewswire…  
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CCRMagazine at www.ccrmagazine.com/ccr-magazine/

or download a PDF copy of the magazine here.
 
   

CCRInteractive: Virtual  Wednesday 29 April

 
The New Way to Learn!  
   
CCRInteractive: Virtual  – Working through challenging times  
As an exclusive publication for the credit, collections, and enforcement industry, CCR takes seriously its responsibility to provide you with the information that you need to help your business thrive in these most difficult of times.
Therefore, we are launching CCRInteractive: Virtual on Wednesday 29 April, as the first of a series of Online Conferences aimed at providing you with the crucial information that you need.
This Online Conference will be Free to attend and will hear from leading industry practitioners and analysts who will give advice on issues such as managing staff remotely, encouraging good mental health, issues around compliance, and setting and reaching goals.
Opportunities will be available to support this Online Conference, which will tie in with this month’s edition of CCR2, which will cover the crucial issue of Disaster Recovery – to find out more, please contact Gary Lucas at gary@ccrmagazine.co.uk.
 
   
To register your interest to attend this Free Online Conference, please contact Stephen Kiely at stephen@ccrmagazine.co.uk.  
   

 

 

 

 

 

 
 
           

Call for government to include import taxes in payments to be deferred 

 

FCA ‘right to step in’ on consumer credit – but measures must cover all forms of borrowing 

 

OECD updates G20 summit on outlook for global economy 


 

 

 

 

 

 
           

Small businesses facing mental health crisis as Coronavirus piles on the woes

 

StepChange welcomes FCA emergency financial relief proposals 

 

 

 

 

 

 

 
     
           

Conveyancing Association and Lease Administrators work together to help home movers during Coronavirus crisis 

 

Response to self-employed income support scheme 

 

Relief for the self-employed, but dedicated hardship fund ‘needed now’ 

 

 

 

 

 

 

 
 
           

Three out of Five UK Households Negatively Financially Impacted by COVID-19 

Foundation Home Loans – update and comment 

 

The Money Stats – March 2020 – Portrait of a Pre-Crisis UK

 

 

 

 

 

 

 
     
           

Time for employers to show loyalty to their staff says entrepreneur 

 

Maintaining a Productive and Healthy Workforce During Coronavirus 

 

‘Lenders must stick to the spirit of the Coronavirus Business Interruption Loan Schemes, not the letter’ 

 
           
 
   

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Latest Credit Industry News from CCR Magazine

For more Credit Industry News please follow the link.

Business and Sports News from Mike Armstrong – See http://mikearmstrong.me

Credit Industry News from Credit Today…

Let’s riff a little bit this week on one of our favorite ratios – the current ratio. First, for any beginners out there, the current ratio is current assets (anything that can be converted to cash within a year) divided by current liabilities (anything due within a year). 

In the “old days,” a 2 to 1 current ratio was something credit execs liked to see. That 2 to 1 seemingly gives you a nice “margin of safety,” knowing that the company you’re looking at has 2 times the current assets as current liabilities. Not bad. 

And it’s still kind of a good benchmark.

But (and I’ve got to say this real soon, before the more experienced analysts out there want to throw tomatoes at the screen) it’s WAY too simplistic. And if you stop there, you’ll really be in trouble. 

First, we’ll note the group of financial types that – over the last decade, roughly – has been in the camp of wanting to lower all the components of current assets to reduce “the investment in” receivables or inventory. That’s a really sound analytical framework and what it does is emphasize the quality of a current asset much more than the quantity. Another way to look at it is that quality is a function of efficiency or how fast everything is moving.

start quote

start quote

On the contrary, of course, a rise actually means you’ve got a higher risk. As receivables slow, they’re less collectible.

end quote

And if you think about it, that’s really true. Let’s say you’ve got a customer with $100 million in sales, selling on 30 days terms. They normally have about $10 million in receivables, representing a DSO of 36 days. 

Now, if you are analyzing things solely from a current ratio standpoint, a rise in receivables might make you feel good – more assets means they can more easily cover their payables, and you’re thus safer, right?

On the contrary, of course, a rise actually means you’ve got a higher risk. As receivables slow, they’re less collectible. And as inventory rises, it’s a sign it’s not selling. Both are serious problems.

So if suddenly – absent a rise in sales – this $10 million in receivables went to $20 million, you might have a much higher current ratio, but a much riskier customer.

So how do you reconcile this issue? 

Well, you can still start with a current ratio benchmark of some sort (it will depend on your industry), but then you should always compare that to the company’s turnover ratios – how fast everything is turning over. The two most important are typically receivables and inventory. 

I remember as a beginning analyst seeing a company with a sub 1 current ratio and being somewhat alarmed. But my boss pointed out that the customer I was looking at typically sold on 7 day terms, so they were turning their receivables very quickly, with plenty of leeway to pay suppliers. They could afford to have a sub-1 current ratio (though I can attest that, while they always paid, they were sometimes a challenge to deal with, and we would have preferred they had a greater “margin of safety”). 

It’s also critically important to look at the trend of the current ratio over time. 

If it’s rising, you always want to know why. 

Is it because of inventory that’s not moving or receivables getting stretched out? If so, then you’ve got a real problem. But if it’s rising simply because of great cash flow and inventory and receivables are still turning nicely, then this might be the type of customer you can pay much less attention to as it’s not likely to be a credit issue.

Revised and updated March 2020.

Let’s riff a little bit this week on one of our favorite ratios – the current ratio. First, for any beginners out there, the current ratio is current assets (anything that can be converted to cash within a year) divided by current liabilities (anything due within a year). 

In the “old days,” a 2 to 1 current ratio was something credit execs liked to see. That 2 to 1 seemingly gives you a nice “margin of safety,” knowing that the company you’re looking at has 2 times the current assets as current liabilities. Not bad. 

And it’s still kind of a good benchmark.

But (and I’ve got to say this real soon, before the more experienced analysts out there want to throw tomatoes at the screen) it’s WAY too simplistic. And if you stop there, you’ll really be in trouble. 

First, we’ll note the group of financial types that – over the last decade, roughly – has been in the camp of wanting to lower all the components of current assets to reduce “the investment in” receivables or inventory. That’s a really sound analytical framework and what it does is emphasize the quality of a current asset much more than the quantity. Another way to look at it is that quality is a function of efficiency or how fast everything is moving.

start quote

start quote

On the contrary, of course, a rise actually means you’ve got a higher risk. As receivables slow, they’re less collectible.

end quote

And if you think about it, that’s really true. Let’s say you’ve got a customer with $100 million in sales, selling on 30 days terms. They normally have about $10 million in receivables, representing a DSO of 36 days. 

Now, if you are analyzing things solely from a current ratio standpoint, a rise in receivables might make you feel good – more assets means they can more easily cover their payables, and you’re thus safer, right?

On the contrary, of course, a rise actually means you’ve got a higher risk. As receivables slow, they’re less collectible. And as inventory rises, it’s a sign it’s not selling. Both are serious problems.

So if suddenly – absent a rise in sales – this $10 million in receivables went to $20 million, you might have a much higher current ratio, but a much riskier customer.

So how do you reconcile this issue? 

Well, you can still start with a current ratio benchmark of some sort (it will depend on your industry), but then you should always compare that to the company’s turnover ratios – how fast everything is turning over. The two most important are typically receivables and inventory. 

I remember as a beginning analyst seeing a company with a sub 1 current ratio and being somewhat alarmed. But my boss pointed out that the customer I was looking at typically sold on 7 day terms, so they were turning their receivables very quickly, with plenty of leeway to pay suppliers. They could afford to have a sub-1 current ratio (though I can attest that, while they always paid, they were sometimes a challenge to deal with, and we would have preferred they had a greater “margin of safety”). 

It’s also critically important to look at the trend of the current ratio over time. 

If it’s rising, you always want to know why. 

Is it because of inventory that’s not moving or receivables getting stretched out? If so, then you’ve got a real problem. But if it’s rising simply because of great cash flow and inventory and receivables are still turning nicely, then this might be the type of customer you can pay much less attention to as it’s not likely to be a credit issue.

Revised and updated March 2020 by Credit Today. For more on this article and more Credit Industry News see the Credit Today Website via the link.

Business and Sports News from Mike Armstrong – See http://mikearmstrong.me

Baker Ing – The Global Debt Matrix

Baker Ing – The Global Debt Matrix 🌍 🇺🇸 🇩🇪 🇮🇹 🇫🇷 🇦🇪 🇨🇳 🇮🇪 💶 💵 💷 💴

http://mikearmstrong.me/international-debt-collection-services-from-baker-ing-the-global-debt-matrix/

— Read on mikearmstrong.me/international-debt-collection-services-from-baker-ing-the-global-debt-matrix/

5 days to CCR-i 2014 – Credit Industry Event in London

CCR-interactive – All The Knowledge Under One Roof… Five Days To Go and the Final Tickets Are Now Available!

The outstanding one-day event for the consumer and commercial credit industry is just five days away.

The conference look set to sell out – with over 400 delegates already booked to attend! So do not miss out on the chance to get all the knowledge fon offer!

To book one of the last remaining delegate places, please contact Alison Lucas on 01702 341948 or alison@ccrmagazine.co.uk. For sponsorship opportunities and to get involved please contact Gary Lucas on 07785 268404 or gary@ccrmagazine.co.uk.

Speakers will include: Tim Sawyer, chief executive officer, The Start Up Loans Company; Gary Brebner, chief executive, Loughborough Building Society; Sue Chapple, head of revenue management, EDF; Lee Birkett, chief executive officer, eMoney Union; Mark Watson-Gandy, member of the Bar Council’s panel of Young Spokesmen for the Bar; Martin Kirby, head of credit, Adecco.

Andrew Jackson, head of collections and recoveries, the Funding Circle; Alastair Barter, senior policy officer, Information Commissioners Office; David Morpeth, operations director, Lloyds Bank Asset Finance; Rajib Chakraborty, lead risk programme data architect, Lloyds Banking Group; Alessia Frisina, chief legal and compliance counsel, De Lage Landen Leasing; Andrew Aspell, European credit programme manager, Office Depot.

Jonathan White, major in the 16 Air Assault Brigade; Sergio Coehlo, head of retail collections and recoveries, Barclays Bank; Jeff McAdam, head of unsecured collections, UK Asset Resolution; Chris Webster, staff fraud risk manager, Yorkshire Building Society; Paul Downer, civil, family & tribunals directorate, Her Majesty’s Courts and Tribunals Service; David Thornley, group credit controller, Fort Vale Engineering.

Stuart Hopewell, credit manager, Fujifilm UK; Robert Skinner, chief executive, Lending Standards Board; Brian Morgan, credit manager, Veolia Environmental Services (UK); Athol Abrahams, head of risk and compliance, D&D Leasing; Sandra Frisby, associate professor, the University of Nottingham; Andriy Sichka, credit operations director, JT International SA.

Diana Keeling, group credit manager, Ian Williams; Mike Walsh, senior manager UK recovery operations, MBNA; Joe Deville, researcher, Goldsmiths, University of London; Richard Bostock, senior policy advisor, the Finance & Leasing Association; Anne Marie Goddard, team leader, enforcement reform, Ministry of Justice; Guy Thompson, credit risk manager EMEA & China, SunChemical Group; Catherine Bradford, credit manager, Linden Foods; Nick King, group credit director, Travis Perkins.

Download the CCR-interactive delegate pack.

This year’s event will allow you to:

► Understand the key compliance issues and how they will impact upon you.
► Discover about the wider legislative and regulatory framework and how it will affect you.
► Set appropriate a payment plan.
► Improve your work with vulnerable customers.
► Recruit and initiate new members of staff.

CCR-i Credit Industry Event in London Page posted “By Mike Armstrong”

6 days to go until CCR-i in London – UK Credit Industry Event

CCR-interactive – Legal Issues & Enforcement Stream… Seven Days To Go!

The outstanding one-day event for the consumer and commercial credit industry is just seven days away. The conference look set to sell out, so do not miss out! To book your delegate place, please contact Alison Lucas on 01702 341948 or alison@ccrmagazine.co.uk. For sponsorship opportunities and to get involved please contact Gary Lucas on 07785 268404 or gary@ccrmagazine.co.uk.

This year’s speakers at CCR-interactive, in association with Hoist Finance, in the Legal Issues & Enforcement Stream include:

► Chair – Martin Leyshon, group director, High Court Enforcement Group
► Mark Watson-Gandy, member of the Bar Council’s panel of Young Spokesmen for the Bar
Putting your case forward in court.
► Katherine Bailey, credit manager, QMH UK
Preparing to go to court – what a creditor needs to know.
► Alessia Frisina, chief legal and compliance counsel, De Lage Landen Leasing
Getting your terms and conditions right at the start to facilitate court action if required.
► Paul Downer, civil family and tribunals service, HM Courts and Tribunals Service
The latest initiatives to improve the enforcement of debt through the courts.
► Sandra Frisby, associate professor, the University of Nottingham
Pre-packs and the insolvency regime – an update.
► Emma Foy, head of financial services, Maldon District Council
► Anne Marie Goddard, team leader, enforcement reform, Ministry of Justice
Emerging reforms in civil enforcement.
► Brian Lewis, credit manager, Hanson UK
Where enforcement sits in your overall collections strategy.

Keynote Speakers

► Susan de Mont, director of credit authorisations, Financial Conduct Authority
Susan is responsible for the delivery of the FCA’s authorisations regime for an estimated 49,000 consumer credit firms transferred from the Office of Fair Trading, in-flight cases, and new applicants.
Delegates can therefore take this opportunity to hear from the key director who is actively doing the job, who has knowledge from the ‘coal face’ of what will be required of the industry.

► Trevor Williams, chief economist, Lloyds Bank
Trevor has both a BA (Hons) and a Masters degree in Economics. He is a Visiting Professor, Banking and Finance, at Derby University.
He heads the research team that supports the bank’s trading and sales activities. He regularly writes articles for publications and appears in the financial press and on television. He is a member of the Institute for Economic Affairs Shadow Monetary Policy Committee.

Download the CCR-interactive Delegate Pack.

This year’s event will allow you to:

► Choose the right enforcement agency for you.
► Understand the recent updates to enforcement regulations.
► Discuss the latest thinking on insolvency reforms.
► Successfully go to court in pursuit of a debt.
► Learn how to take your team’s performance to the next level.

Posted “By Mike Armstrong”

7 days to go until CCR-i 2014 – Credit Industry Event in London!

CCR-interactive – Legal Issues & Enforcement Stream… Seven Days To Go!

The outstanding one-day event for the consumer and commercial credit industry is just seven days away. The conference look set to sell out, so do not miss out! To book your delegate place, please contact Alison Lucas on 01702 341948 or alison@ccrmagazine.co.uk. For sponsorship opportunities and to get involved please contact Gary Lucas on 07785 268404 or gary@ccrmagazine.co.uk.

This year’s speakers at CCR-interactive, in association with Hoist Finance, in the Legal Issues & Enforcement Stream include:

► Chair – Martin Leyshon, group director, High Court Enforcement Group
► Mark Watson-Gandy, member of the Bar Council’s panel of Young Spokesmen for the Bar
Putting your case forward in court.
► Katherine Bailey, credit manager, QMH UK
Preparing to go to court – what a creditor needs to know.
► Alessia Frisina, chief legal and compliance counsel, De Lage Landen Leasing
Getting your terms and conditions right at the start to facilitate court action if required.
► Paul Downer, civil family and tribunals service, HM Courts and Tribunals Service
The latest initiatives to improve the enforcement of debt through the courts.
► Sandra Frisby, associate professor, the University of Nottingham
Pre-packs and the insolvency regime – an update.
► Emma Foy, head of financial services, Maldon District Council
► Anne Marie Goddard, team leader, enforcement reform, Ministry of Justice
Emerging reforms in civil enforcement.
► Brian Lewis, credit manager, Hanson UK
Where enforcement sits in your overall collections strategy.

Keynote Speakers

► Susan de Mont, director of credit authorisations, Financial Conduct Authority
Susan is responsible for the delivery of the FCA’s authorisations regime for an estimated 49,000 consumer credit firms transferred from the Office of Fair Trading, in-flight cases, and new applicants.
Delegates can therefore take this opportunity to hear from the key director who is actively doing the job, who has knowledge from the ‘coal face’ of what will be required of the industry.

► Trevor Williams, chief economist, Lloyds Bank
Trevor has both a BA (Hons) and a Masters degree in Economics. He is a Visiting Professor, Banking and Finance, at Derby University.
He heads the research team that supports the bank’s trading and sales activities. He regularly writes articles for publications and appears in the financial press and on television. He is a member of the Institute for Economic Affairs Shadow Monetary Policy Committee.

Download the CCR-interactive Delegate Pack here.

This year’s event will allow you to:

► Choose the right enforcement agency for you.
► Understand the recent updates to enforcement regulations.
► Discuss the latest thinking on insolvency reforms.
► Successfully go to court in pursuit of a debt.
► Learn how to take your team’s performance to the next level.

Posted “By Mike Armstrong”