![]() Accrued Expenses = $10m with +$1m Increase Per Year.Accounts Payable (A/P) = $50m with +$5m Increase Per Year.Property, Plant & Equipment (PP&E) = $225m with -$5m Decrease Per Year.Inventory = $60m with -$2m Decrease Per Year.Accounts Receivable = $45m with -$2m Decrease Per Year.Cash & Equivalents = $25m with +$5m Increase Per Year.Revenue = $100m with +$20m Increase Per Year.Suppose we’re tasked with projecting the following three activity ratios across five years:Īs of Year 0, the financial assumptions to be used are shown below, with the year-over-year ( YoY) growth assumptions to the right. The formula to calculate the inventory turnover, receivables turnover, and payables turnover ratio are as follows. ![]() accounts payable, or “A/P”) in a specific period.
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