In this video on Trade Receivables, here we study definition, how it works, examples and why trade receivables are critical to corporate liquidity.
𝐓𝐫𝐚𝐝𝐞 𝐑𝐞𝐜𝐞𝐢𝐯𝐚𝐛𝐥𝐞𝐬 𝐌𝐞𝐚𝐧𝐢𝐧𝐠
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Trade Receivables is the accounting entry in an entity's balance sheet that arises from the Entity's sale of goods and services to its credit customers.
𝐓𝐫𝐚𝐝𝐞 𝐑𝐞𝐜𝐞𝐢𝐯𝐚𝐛𝐥𝐞𝐬 𝐄𝐱𝐚𝐦𝐩𝐥𝐞
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XYZ Corporation is a manufacturer of electrical equipment. It recorded sales of USD 100 billion in FY18, with 30% sales on credit to Corporate Customers.
In its balance sheet, the trade receivables accounting entry for the transaction will be as follows:
Particulars Billion USD
Total Sales in FY18 100
Credit Sales 40%
Accounts Receivables / Trade $40
Receivables
𝐂𝐚𝐬𝐡 𝐂𝐨𝐧𝐯𝐞𝐫𝐬𝐢𝐨𝐧 𝐂𝐲𝐜𝐥𝐞
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#1 - Cash conversion cycle is the number of days a company takes to convert its inventory into cash.
#2 - The cash conversion cycle is one of most key metrics we look at while analyzing Firms ' liquidity positions.
To know more about 𝐓𝐫𝐚𝐝𝐞 𝐑𝐞𝐜𝐞𝐢𝐯𝐚𝐛𝐥𝐞𝐬, you can go to this 𝐥𝐢𝐧𝐤 𝐡𝐞𝐫𝐞:-
https://www.wallstreetmojo.com/trade-receivables/
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Тэги:
#trade_receivables #what_is_trade_receivables #trade_receivables_account #trade_receivables_account_format #trade_receivables_example