Short Term Borrowings

Explanation: Short term borrowings refer to funds borrowed by a company for a relatively short duration, typically less than one year, to meet its immediate financing needs or working capital requirements. These borrowings are used to address short-term cash flow gaps, finance seasonal fluctuations in operations, or fund temporary expenses. Short term borrowings may include bank loans, commercial paper, lines of credit, and other forms of short-term debt instruments.

Example: Maruti Suzuki reported short term borrowings of 1,215.80 crore rupees as of FY23, indicating the amount of debt borrowed by the company with a maturity of less than one year. These borrowings are utilized by Maruti Suzuki to finance its short-term operational requirements, such as inventory purchases, payment of wages and salaries, and other working capital needs. Analyzing short term borrowings helps assess the company’s liquidity position, debt management strategies, and its ability to meet short-term financial obligations.

You can view the Short-Term Borrowings for any company on Radar under Current Liabilities in the Balance Sheet section.