Financial model of inventory turnover

Financial model of inventory turnover

Financial model of inventory turnover:
1) the financial model is designed to calculate the complex turnover of inventory;
2) the model specifies two flows of movement of goods: the incoming flow in the form of purchase transactions and the outgoing flow in the form of sales transactions of goods;
3) the flows of purchase and outgoing of inventory are joined according to the FIFO rule to identify the time of entry of the outgoing goods or the goods located in the warehouse at the end of the period under consideration;
4) the model calculates two components of the complex indicator of inventory turnover, namely the turnover period of inventory for a given period and the age of the remaining inventory at the end of this period;
5) the turnover period is also calculated both for the physical movement of goods, which is called the operational turnover period, and for the financial movement - the financial turnover period;
6) additionally, in order to provide a complete picture of sales efficiency and warehouse management, the model calculates the indicators of sales marginality and effective margin, or, what is the same, the internal rate of return (IRR);
7) a tab with a dashboard has been added to the financial model presented here, in which efficiency indicators are calculated by product categories, and the required amount of funds that must be allocated for the next purchase of goods from suppliers in order to maintain sales in the near future is calculated;
8) an assessment is made of the cost of stale, illiquid goods, as well as the age structure of the stock