Ratios - Printable Version +- Accountancy Forum (https://www.accountancy.com.pk/forum) +-- Forum: The Profession (https://www.accountancy.com.pk/forum/forumdisplay.php?fid=4) +--- Forum: Accounting and Audit (https://www.accountancy.com.pk/forum/forumdisplay.php?fid=7) +--- Thread: Ratios (/showthread.php?tid=6902) Ratios - taragbeh - 11-26-2009 How do i calculate accounts payable period? - kamranACA - 11-26-2009 Ratio = (Average accounts payable* / purchases during the year) x 365 days *Average A/C payable = (opening balance of A/C payable + closing balance of A/C payable) / 2 Regards, - taragbeh - 11-26-2009 Thanks but how can I calculate the purchases if it not given on the financial statement?
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Originally posted by kamranACA
Ratio = (Average accounts payable* / purchases during the year) x 365 days *Average A/C payable = (opening balance of A/C payable + closing balance of A/C payable) / 2 Regards,
- kamranACA - 11-26-2009 Dear You may find purchases in the note of "Cost of Sales" (or its sub-note) where normally the reconciliation of material consumed is disclosed. If it is not disclosed try the following Material purchased = Closing stock of Raw material (normally disclosed as a component of stock-in-trade) Add Raw Material Consumed (normally disclosed in cost of sales) Less Opening stock of Raw material (normally disclosed as a component of stock-in-trade in comparative figures) If you don't find purchases by any means, then you can at least take "Cost of Sales" instead of Purchases. Although it's not appropriate but is used in various solutions theoratically. Regards, KAMRAN. - taragbeh - 11-26-2009 thx
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Originally posted by kamranACA
Dear You may find purchases in the note of "Cost of Sales" (or its sub-note) where normally the reconciliation of material consumed is disclosed. If it is not disclosed try the following Material purchased = Closing stock of Raw material (normally disclosed as a component of stock-in-trade) Add Raw Material Consumed (normally disclosed in cost of sales) Less Opening stock of Raw material (normally disclosed as a component of stock-in-trade in comparative figures) If you don't find purchases by any means, then you can at least take "Cost of Sales" instead of Purchases. Although it's not appropriate but is used in various solutions theoratically. Regards, KAMRAN.
- kamranACA - 11-26-2009 Welcome buddy. Regards,