54 lines
1.9 KiB
Org Mode
54 lines
1.9 KiB
Org Mode
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#+title: Section 7 | Lesson 40 - Forecasting, Budgeting, Fiscal Year
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* Links
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- [[./../mba-main.org][<Back to Main MBA]]
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- [[https://www.udemy.com/course/an-entire-mba-in-1-courseaward-winning-business-school-prof/learn/lecture/4282974#overview][S07:L40 Forecasting, Budgeting, Fiscal Year]]
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* Notes
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How do companies make budges
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How do they forcast
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** Forecastin is always based on a percentage of sales.
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1. forecast what your sales are going to be
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2. everything else is just a percent of revenue
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*** when to companies forecast
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- Public companies forecast quarterly
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- Startups forecast monthly
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- most startups collapse
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*** Fiscal years
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- companies note when a season ends
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- companies also regard their years as "ending" on a different months
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- some companies end on black friday
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- this is when they make their most money
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- japanese companies end in march
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** Ethics
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- be conservative and honest with forecasts
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- jailtime
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- it's easy to make clerical mistakes
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- overlook unethical co workers
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- some companies try to take from a different quarter to make up shortfalls
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** Cash Conversion Period Ratio
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- *COGS*: Cost of Goods Sold
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- how much it costs for goods for the day
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*** examples
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- $5000 of inventory
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- COGS is $50
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- we have 100 days worth of goods
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if we put $1 into inventory it won't be converted into cash for another 50 days
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** Inventory to sale conversion period
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- you can also do this by season, just replace 365 days with 90 days
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\(\text{ISCP} = \frac{\text{average inventories}}{\text{COGS} \times 365}\)
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** Purchase to Payment Conversion Period
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- pay your bills as late as you can
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\(\text{Purchase to Payment Conversion Period} = \frac{\text{average payables} + \text{average accrued liabilities}}{\text{COGS} \times 365}\)
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