Management of working capital (trade payables and receivables)

Hi John,

Could you please make sense of the next.

When calculating whether it is worth or not on accepting discounts from purchases on bulk orders – we calculate costs that depends on level of trade payables – how should revised trade payables be calculated: based on initial annual cost of purchases, or on revised annual cost of purchases?
Say, 1% discount is offered on bulk orders. What should be used instead of SUM OF PURCHASES?
Trade payables = revised payment period * SUM OF PURCHASES / 365 days.

Same with trade receivables – use initial sales revenue, or revised sales revenue.