This question has nothing to do with contracting but lots to do with accounting....
I've had a look at a certain company's accounts (a specialist secondhand car dealer) and something puzzles me. From one year to the next their trade debtor amount went from £1M to £3.5M. And his trade creditor amount went from £2.5M to £5.2M. I can't get my head around what this means, if anything. To the best of my knowledge their business model has remained largely the same: sell second hand cars. Some they own and some they market for clients. Average price is perhaps £75K. Any insights would be appreciated.
I've had a look at a certain company's accounts (a specialist secondhand car dealer) and something puzzles me. From one year to the next their trade debtor amount went from £1M to £3.5M. And his trade creditor amount went from £2.5M to £5.2M. I can't get my head around what this means, if anything. To the best of my knowledge their business model has remained largely the same: sell second hand cars. Some they own and some they market for clients. Average price is perhaps £75K. Any insights would be appreciated.
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