Cash Flow Forecasting

Cash Flow Forecasting

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Creditors

Creditors (also known as accounts payable) are those to whom the com-

pany owes money – for example, suppliers of raw material, who have

given the company credit period in which to pay and are shown as liabil-

ities in the balance sheet. They include the following categories:

■ Trade creditors – suppliers to whom the company owes money. The size

of the trade creditors figure will reflect the extent to which suppliers

are financing the company’s business. It is useful to compare debtor

Table 2.3 Country factors – terms of trade

Country Average payment terms (days)

Finland 24

Denmark 35

Germany 38

Australia 43

UK 50

Ireland 59

France 64

Spain 73

Italy 84

Table 2.4 Industry factors – credit periods (days)

Industry 1997 Q3 1996 Q4 1995 Q4

Leisure and hotels 23 23 20

Building and construction 28 30 28

Breweries 35 35 38

Oil 42 48 43

Textiles and clothing 46 49 51

Builders’ materials 49 53 46

Pharmaceuticals 60 69 61

Printing, paper, and packaging 61 66 64

Source: CCN Corporate Health Check.

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