Underscoring the importance of trade payable ratio as an important tool to predict future stock price return, Macquarie analysts point out that the ratio is persistent and has longer-term predictive power. Woei Chan and colleagues in their January 29 piece titled: “Hidden Quality – Trade links where relationships matters” argue that the ratio can be used as a proxy for the significant private information being transmitted between buyers and suppliers.
Trade Payable Ratio is an integral part of business
As part of their daily commercial transactions, many firms would prefer to pay later and rely on trade credit. Trade credit or trade payable is an agreement between businesses in which credit is provided for a specific period of time from a supplier to...
