Creditors' Payment Period
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Analysis and Interpretation of Financial Statements for Decision Making
MS: Tempoh Pembayaran Pemiutang · EN: Creditors' Payment Period · ZH: 应付账款付款期
Meaning
The creditors' payment period shows the average number of days taken to pay debts to creditors. Its formula is (creditors ÷ credit purchases) × 365 days. It helps assess how the business manages payments to its suppliers.
Example
Setia Enterprise has creditors of RM15,000 and credit purchases of RM120,000. The creditors' payment period is (15,000 ÷ 120,000) × 365 = 46 days to pay the debts to suppliers.
Source: DSKP KSSM Prinsip Perakaunan Tingkatan 5