Credit management

Fifi10

Please help in calculating trade payables payment period and inventory holding period in days

shamilkaria

Hi @Fifi10

I hope you are well?

To calculate Trade Payable Days Payment Period that is calculated as follows:

Cost Of Sales hasn't been provided but to work out your cost of sales it will be: Gross Profit - Sales Revenue = Cost of Sales

(Trade Payables / Cost Of Sales) x 365 Days.

Inventory Holding Period in Days = (Inventories / Cost Of Sales) x 365 Days.

If you want me to work out and give you the answer do let me know. But give this a try and you should hopefully get it correct. If it's not correct do let me know I can look at it again and it could be because of the closing inventories.

Kind regards

Shamil