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Explanation: Long Term Loans & Advances represent the amounts extended by a company to other parties, which are expected to be repaid over an extended period exceeding one year. These loans and advances typically include financial assistance provided to suppliers, subsidiaries, or other entities for business purposes. They are classified as non-current assets on the balance sheet because the company expects to recover them over a longer time horizon.
Example: Maruti Suzuki reports 2,403.10 crore rupees of Long Term Loans & Advances as of FY23 in their balance sheet under non-current assets. These amounts reflect the financial aid extended by Maruti Suzuki to suppliers, subsidiaries, or other entities for business purposes, with the expectation of repayment over a period exceeding one year. Monitoring Long Term Loans & Advances provides insights into Maruti Suzuki’s investment in other entities and its overall financial health and liquidity position.
You can view the Long Term Loans & Advances for any company on Radar under Non Current Assets in the Balance Sheet section.