Trade Credit as % of Current Liabilities

Trade Credit as % of Current Liabilities

Trade Creditors x 100

Current Liabilities (CL)

 

Benchmark: 45%

Credit given by suppliers as a percentage of short term debts, showing what proportion of short term lending the company receives from its suppliers.

Relate this ratio to current ratio and quick ratio to give an indication of the credit risk (see also trade credit ratios and gearing %).