Trade Credit as % Shareholders’ Funds

Trade Credit as % Shareholders’ Funds

Trade Creditors x 100

Shareholders’ Funds (bottom of balance sheet)

 

Benchmark: 25 – 30%

Credit given by suppliers as a percentage of shareholders’ funds (money supplied by shareholders, reserves and the balance from the profit and loss account)

The ratio shows how important suppliers are in funding the business. See trade credit ratios, also, it may be worth comparing this to gearing %