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Hi,
I am wondering about how the calculations would differ based on the above parameters (Month/ Full Year/ Fiscal Year to Date).For instance, if you are doing a Days Payable or Days Sales analysis for the month instead of the full year, what figures should be used?
Would the full year end AR or AP be used against the current month sales or cost of sales?
Also, I’m thinking the ratio should be multiplied by the actual number of days in the month (e.g: 31 for August) instead of 365.Please advise. Any insight would be appreciated. Thanks.
Hi,
I doubt you would get anything other than annual comparisons in the exam but the ratios that would be impacted if it wasn’t would be the working capital ones (inventory days, receivable days, payable days).
So if we were looking at two six month periods then we would multiply by 182.5 days, as that is half a year (I think), instead of 365 days.
All other ratios for performance and gearing would be calculated in the usual fashion.
Thanks
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