The outstanding creditors balances can also be calculated based on a number of days assumption but users should keep in mind that this balance is influenced by inventory purchases as well as expense items and the ratio of cash and credit payments. The trading terms negotiated with suppliers can therefore be used in calculating the estimate but the extent of expense line items paid on a cash basis should also be taken into account.

CopyFinancial > The outstanding creditors balances can also be calculated based on a number of days assumption but users should keep in mind that this balance is influenced by inventory purchases as well as expense items and the ratio of cash and credit payments. The trading terms negotiated with suppliers can therefore be used in calculating the estimate but the extent of expense line items paid on a cash basis should also be taken into account.