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ronny abraham 2024-12-01 18:29:45 +02:00
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@ -29,26 +29,44 @@ How do they forcast
** Ethics ** Ethics
- be conservative and honest with forecasts - be conservative and honest with forecasts
- some companies try to take from a different quarter to make up shortfalls
- jailtime - jailtime
- it's easy to make clerical mistakes - it's easy to make clerical mistakes
- overlook unethical co workers - overlook unethical co workers
- some companies try to take from a different quarter to make up shortfalls
** Cash Conversion Period Ratio ** time to turn asses into cash
- *COGS*: Cost of Goods Sold *** Cash Conversion Period Ratio
- how much it costs for goods for the day - when do we get PAID baby?
- *COGS*: Cost of Goods Sold
- how much it costs for goods for the day
*** examples **** example
- $5000 of inventory - $5000 of inventory
- COGS is $50 - COGS is $50
- we have 100 days worth of goods - we have 100 days worth of goods
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
- measures on a yearlly bases how long it takes to turn inventory to cash over a year
- you can also do this by season, just replace 365 days with 90 days - you can also do this by season, just replace 365 days with 90 days
\(\text{ISCP} = \frac{\text{average inventories}}{\text{COGS} \times 365}\) #+NAME: inventory_to_sale_conversion
\[
\text{ISCP} = \frac{\text{average inventories}}{\text{COGS} \times 365}
\]
** Purchase to Payment Conversion Period ** time to turn credit (not assets) into cash
- when selling product on credit, how long does it take to turn it into cash
#+NAME: sales_to_cash_conversion
\[
\text{Sales to Cash Conversion Period} = \frac{\text{Average Receivables}}{\text{Sales}} \div 365
\]
** time to pay your bills as late as possible
- Purchase to Payment Conversion Period
- pay your bills as late as you can - pay your bills as late as you can
\(\text{Purchase to Payment Conversion Period} = \frac{\text{average payables} + \text{average accrued liabilities}}{\text{COGS} \times 365}\) #+Name: purchase_to_payment_conversion
\[
\text{Purchase to Payment Conversion Period} = \frac{\text{average payables} + \text{average accrued liabilities}}{\text{COGS} \times 365}
\]