Trade Credit Growth

Trade Credit Growth

Latest Trade Credit – Previous Trade Credit X 100

Previous Trade Credit

 

Benchmark: 10%

The percentage increase/decrease in the value of credit given by suppliers on the previous year.

Compare this with stock growth to see if trade credit has grown faster than stock value. If this is the case, it may be the result of payment terms being extended or stock being turned over faster (see stockturn).

A fall suggest pressure (uncertainty) from suppliers or a drop in performance.