Accounts payable are financial liabilities that are payable

The population of Western Europe is more thanour compatriots, is familiar with this form of loan as a loan. The credit policy of any state testifies to the presence within the country of firmly standing financial and credit institutions, which contribute to maintaining a balance between the needs of different categories of citizens and the demand for products of domestic enterprises.

For reasons of fairness, it should be noted thatOur credit institutions are in the stage of growth, but to this day they still do not reach the similar in value Western structures. This manifests itself in a less flexible system of lending to provincial regions than megacities and large cities. The conditions for granting loans often do not correspond to the depth of the purse of the average citizen who comes from the working class. Also, a small choice of loan terms is evident, so buying a car, let alone a car with a loan, is unlikely, and for those who dare to take such a loan, it turns into a debt hole in the near future.

For any person who decided to take such a step,Accounts payable is a fact that does not add optimism, as the funds, as a rule, have to be returned for a long time. For a large enterprise, accounts payable is a fat minus in the balance sheet column. The increase in accounts payable, which indicates a continuous increase in the loan, significantly reduces the financial stability of the company. In spite of the fact that there are free funds, which are usually taken for the purposeful financing of individual projects, or for the closure of other current debts, do not forget that these material resources have a stamp of borrowed funds, and this instantly generates new obligations for payment.

Active lending policy can be successfulin those cases when the speed of turnover of the organization's capital allows timely and painless for other areas of activity to extinguish such loans. Among the companies that meet this criterion are those whose products have a high demand and, accordingly, a high level of liquidity.

From the point of view of economic theory, thedebt - this is the funds attracted by the organization for temporary use, which in a certain period of time are subject to return with a fixed interest for their use, to persons from whom they were borrowed. There are several other definitions, according to which, accounts payable is a type of obligation that reflects the debt owed to payment to other persons (creditors). Regardless of the different trends in economic science, the essence of the term "accounts payable" in relation to business entities, as well as to individuals, remains unchanged.

To assess the credit performance of enterprisesoften used indicators such as the ratio of accounts payable and the ratio of its turnover. Since this type of debt is a repayable loan, more attention is paid to the second indicator. In general, the ratio of turnover of accounts payable is an indicator of financial activity, which is calculated by the ratio of the cost of goods sold to the average for the year the amount of debt on loans. A higher value of this indicator indicates that the company has a financial strength in the form of tangible assets, which allows it to quickly make settlements with its suppliers.

</ p>
Liked:
0
Similar articles
What is external debt
Coefficient of current liquidity: shows
Current liabilities are ... Degree
Short-term liabilities and their
Accounts payable and rules of its
Balance liquidity analysis as one of the
We estimate the liquidity of the balance for the valuation
Balance liquidity assessment as one of the
Borrowed capital
Popular Posts
up