COGS Part 3 (Inventory)
When to use
When constructing a basic financial model.
- This section relates to Purchases.
- The Purchases line needs to be calculated by: Purchases x Price
- The Closing Payables can be calculated by taking the purchases value x days payable / days in period
- Once the Purchases have been calculated the Control Account can be worked out
- The Opening Payables will be the Closing Payables from the previous month
- The Purchases will come from the Purchases value worked out in cell J78
- The Closing Payables will come from cell J84
- The Cash Payments will be the difference between the Closing Balance and the sum of the Opening Payables and the Purchases
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