This indicator measures the
percentage of a company's working capital sourced through bank loans, reflecting the reliance on external financial institutions for short-term operational needs. A higher percentage suggests that a business is actively leveraging bank financing to support inventory purchases, payroll, and other immediate expenses, potentially indicating growth ambitions or cash flow difficulties. Conversely, a lower ratio may indicate a preference for self-financing or stronger cash reserves. Analyzing this metric helps stakeholders understand a company's liquidity management, creditworthiness, and overall financial health, while also revealing broader economic trends related to bank lending practices and the business environment.
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