Tag: Balance sheet

scenario and sensitivity analysis

Sensitivity Analysis vs Scenario Analysis

Sensitivity analysis is used when preparing a business plan financial projection to assess the impact on the financial projection of changes in each input variable. Scenario analysis involves changing all input variables at the same time to show the base, best, and worse case scenarios. By doing this the business can show how vulnerable its business plan is to changes in major assumptions and inputs. Scenario and sensitivity analysis is carried out in order to assess risk.

Last modified October 8th, 2019 by Michael Brown
Read more
opening debt payment term - extract from the financial projections template

Enter Opening Debt Payment Term

Debt finance is normally evidenced by a note or document which specifies the amount, interest rate, and date of repayment. The date of repayment will dictate the payment term for the debt, for example a debt might be payable in five years time.

In the previous step the opening balance sheet debt was entered, and in order to allow for this debt to be repaid, an opening debt payment term needs to be entered.

Last modified August 20th, 2019 by Michael Brown
Read more
inventory days formula

Inventory Days – How to Determine

Inventory or stock as it is sometimes referred to, is the total of raw materials, work in process, and finished goods that a business holds for the purpose of resale.

If the value of the inventory is divided by the value of the average daily cost of sales, then the resulting figure is the average number of days sales which the business is holding. This number is referred to as inventory days, days inventory outstanding, inventory turnover days, or stock days.

Last modified September 6th, 2023 by Michael Brown
Read more

How to Determine Days Payable Outstanding

A business which purchases on account from its suppliers will at any point in time have amounts outstanding to them for unpaid invoices. The amount outstanding is referred to as accounts payable or sometimes as trade creditors.

If the value of the accounts payable is divided by the value of the average daily cost of sales, then the resulting figure is the number of days of payable which are outstanding. This number is sometimes referred to as days payables outstanding, accounts payable days or trade creditor days.

Last modified January 6th, 2023 by Michael Brown
Read more
days sales outstanding

How to Determine Days Sales Outstanding

A business which sells on account to its customers will at any point in time have amounts outstanding from them for unpaid invoices. The amount outstanding is referred to as accounts receivable or sometimes as trade debtors.

If the value of the accounts receivable is divided by the value of the average daily sale, then the resulting figure is the number of days of sales which are outstanding. This number is sometimes referred to as day sales outstanding, accounts receivable days or trade debtor days.

Last modified November 10th, 2022 by Michael Brown
Read more
capital opening balance - extract from the financial projections template

Enter Capital Opening Balance

The opening day capital balance forms part of the opening balance sheet of the business. Capital represents cash and cash equivalents introduced by the owners of the business.

The capital opening balance is recorded in the balance sheet of a business under its own heading of capital and together with retained earnings, forms part of the owners equity in the business.

Last modified November 3rd, 2022 by Michael Brown
Read more
enter debt opening balance - extract from the financial projections template

Enter Debt Opening Balance

The opening day debt balance forms part of the opening balance sheet of the business. Debts are amounts which are owed by the business to providers of debt finance sometimes referred to as lenders.

Debts include many types of finance including loan, borrowings, mortgages, credit cards and generally any form of finance which involves the payment of interest.

Last modified August 29th, 2023 by Michael Brown
Read more
inventory opening balance - extract from the financial projections template

Enter Inventory Opening Balance

The opening day accounts payable balance forms part of the opening balance sheet of the business. Accounts payable are amounts which are owed by the business to its suppliers, they are sometimes referred to as trade creditors.

If a supplier allows a business credit and invoices it for a product or service and payment is made at a later date 30 days 60 days etc, then while the business owes the supplier the money it are classified as an accounts payable in the accounts of the business.

Last modified February 16th, 2023 by Michael Brown
Read more
accounts payable opening balance - extract from the financial projections template

Accounts Payable Opening Balance

The opening day accounts payable balance forms part of the opening balance sheet of the business. Accounts payable are amounts which are owed by the business to its suppliers, they are sometimes referred to as trade creditors.

If a supplier allows a business credit and invoices it for a product or service and payment is made at a later date 30 days 60 days etc, then while the business owes the supplier the money it are classified as an accounts payable in the accounts of the business.

Last modified February 23rd, 2023 by Michael Brown
Read more
accounts receivable opening balance - extract from the financial projections template

Accounts Receivable Opening Balance

The opening day accounts receivable balance forms part of the opening balance sheet of the business. Accounts receivable are amounts which are owed to you by your customers, they are sometimes referred to as trade debtors.

When you allow your customer credit and invoice them for a product or service and receive payment at a later date 30 days 60 days etc, then while they owe you the money they are classified as an accounts receivable.

Last modified January 5th, 2023 by Michael Brown
Read more
altman z score calculator v 1.0

Altman Z Score Calculator Model

The Z score Altman model takes five key accounting ratios for a business, and using the Altman Z score formula weights them according to an industry type, and combines them into a single score (the Z score) to give an indication of the financial health of a business.

Last modified July 16th, 2019 by Michael Brown
Read more
cash opening balance

Enter Cash Opening Balance

The opening day cash balance forms part of the opening balance sheet of the business, and includes amounts which are held by a business in the form of notes and coins (e.g. petty cash) or which are held at a bank in the form of on demand deposits such as current accounts and savings accounts.

The cash opening balance comes under the heading of current assets in the balance sheet of the business.

Last modified February 15th, 2023 by Michael Brown
Read more

You May Also Like