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Explanation: Trade receivables, also known as accounts receivable, represent the amounts owed to a company by its customers for goods or services sold on credit. These assets arise when a company provides goods or services to customers on credit terms and hasn’t yet received the payment. Trade receivables are typically short-term assets and are considered as part of the company’s working capital.
Example: Maruti Suzuki had trade receivables of 3,301.40 crore rupees as of FY23. This amount signifies the outstanding payments owed to the company by its customers for goods or services provided on credit. Analyzing trade receivables helps assess the company’s liquidity position, its ability to collect outstanding amounts, and the effectiveness of its credit management policies.
You can view the Trade Receivables for any company on Radar under Current Assets in the Balance Sheet section.