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added some formulas

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ronny abraham 2024-11-28 02:35:49 +02:00
parent 8003fbee7b
commit 033b1a54e2
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@ -46,4 +46,9 @@ How do they forcast
if we put $1 into inventory it won't be converted into cash for another 50 days if we put $1 into inventory it won't be converted into cash for another 50 days
** Inventory to sale conversion period ** Inventory to sale conversion period
\(\text{ISCP} = \frac{\text{average inventories}}{\text{COGS} \cdot 365}\) - you can also do this by season, just replace 365 days with 90 days
\(\text{ISCP} = \frac{\text{average inventories}}{\text{COGS} \times 365}\)
** Purchase to Payment Conversion Period
- pay your bills as late as you can
\(\text{Purchase to Payment Conversion Period} = \frac{\text{average payables} + \text{average accrued liabilities}}{\text{COGS} \times 365}\)