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Worked-example setupScope and assumptions
- The operating rollforwards and period continuity already reconcile.
- Beginning-ending averages adequately represent the three operating balances for this bounded annual exercise.
- All days measures use 365 and exact disclosed numerators.
- Period
- Aster Year 3
- Units
- Whole USD; turnover in times per year; days as aggregate equivalents
- Rounding
- Full precision internally; turnover and days displayed to two decimals
Build averages before ratios
| Operating balance | Opening | Ending | Average |
|---|---|---|---|
| Accounts Receivable | $42,000 | $55,000 | $48,500 |
| Inventory | $66,000 | $80,000 | $73,000 |
| Accounts Payable | $35,000 | $44,000 | $39,500 |
Preserve the three numerator definitions
| Measure | Exact numerator | Turnover | Days equivalent |
|---|---|---|---|
| Receivables | $325,000 net credit sales | 6.70× | 54.47 days |
| Inventory | $235,000 cost of goods sold | 3.22× | 113.38 days |
| Payables | $210,000 credit purchases | 5.32× | 68.65 days |
Each days result is 365 ÷ turnover. It is an aggregate equivalent under the
same annual convention, not an invoice or unit stopwatch.
Keep the three-year component path visible
| Period | DSO | DIO | DPO | Cash conversion cycle |
|---|---|---|---|---|
| Year 1 | 47.91 | 105.44 | 64.48 | 88.87 |
| Year 2 | 48.03 | 104.29 | 62.15 | 90.16 |
| Year 3 | 54.47 | 113.38 | 68.65 | 99.20 |
Each cycle equals DSO plus DIO less DPO. The table is displayed to two decimals; the expected block retains the checked full-precision values.
Convert outputs into evidence requests
The calculations show how the operating balances relate to their flows. To evaluate them, request:
- customer terms, aging, write-offs, and subsequent collections;
- product aging, demand, stockouts, markdowns, and replenishment lead times;
- supplier terms, overdue status, discounts, concentration, and subsequent payments; and
- monthly balances if the endpoints are not representative.
Do not call 6.70 receivables turns “good,” 113.38 Inventory days “bad,” or 68.65 payable days “free financing” from this packet alone.
Verified calculation · multi period statement analysis
The curriculum loader recomputed this example before it entered the site build. Expand any structured input to inspect the stated facts.
- common size balance base
- total assets
- common size income base
- net sales
- days basis
- actual-period-days
- entities
- 1 field
Inspect data
{
"aster": {
"period_order": [
"year_1",
"year_2",
"year_3"
],
"periods": {
"year_1": {
"days_in_period": 365,
"ending": {
"accounts_payable": 28000,
"accounts_receivable": 33000,
"cash": 22000,
"inventory": 54000,
"noncurrent_assets": 100000,
"noncurrent_liabilities": 65000,
"other_current_assets": 11000,
"other_current_liabilities": 16000,
"total_equity": 111000
},
"flow": {
"cost_of_goods_sold": 180000,
"credit_purchases": 150000,
"merchandise_purchases": 184000,
"net_credit_sales": 240000,
"net_income": 28000,
"net_sales": 300000,
"operating_expenses": 80000
},
"opening": {
"accounts_payable": 25000,
"accounts_receivable": 30000,
"cash": 20000,
"inventory": 50000,
"noncurrent_assets": 90000,
"noncurrent_liabilities": 60000,
"other_current_assets": 10000,
"other_current_liabilities": 15000,
"total_equity": 100000
}
},
"year_2": {
"days_in_period": 365,
"ending": {
"accounts_payable": 35000,
"accounts_receivable": 42000,
"cash": 24000,
"inventory": 66000,
"noncurrent_assets": 106000,
"noncurrent_liabilities": 70000,
"other_current_assets": 12000,
"other_current_liabilities": 18000,
"total_equity": 127000
},
"flow": {
"cost_of_goods_sold": 210000,
"credit_purchases": 185000,
"merchandise_purchases": 222000,
"net_credit_sales": 285000,
"net_income": 27000,
"net_sales": 345000,
"operating_expenses": 95000
},
"opening": {
"accounts_payable": 28000,
"accounts_receivable": 33000,
"cash": 22000,
"inventory": 54000,
"noncurrent_assets": 100000,
"noncurrent_liabilities": 65000,
"other_current_assets": 11000,
"other_current_liabilities": 16000,
"total_equity": 111000
}
},
"year_3": {
"days_in_period": 365,
"ending": {
"accounts_payable": 44000,
"accounts_receivable": 55000,
"cash": 25000,
"inventory": 80000,
"noncurrent_assets": 111000,
"noncurrent_liabilities": 75000,
"other_current_assets": 14000,
"other_current_liabilities": 20000,
"total_equity": 146000
},
"flow": {
"cost_of_goods_sold": 235000,
"credit_purchases": 210000,
"merchandise_purchases": 249000,
"net_credit_sales": 325000,
"net_income": 25000,
"net_sales": 380000,
"operating_expenses": 110000
},
"opening": {
"accounts_payable": 35000,
"accounts_receivable": 42000,
"cash": 24000,
"inventory": 66000,
"noncurrent_assets": 106000,
"noncurrent_liabilities": 70000,
"other_current_assets": 12000,
"other_current_liabilities": 18000,
"total_equity": 127000
}
}
}
}
}- horizontal comparison
- immediately-preceding-period
- trend base
- first-period
- zero base percentage policy
- omit
Recomputed result
| Measure | Value |
|---|---|
| 1 cash conversion cycle days | 88.8674 |
| 1 days inventory outstanding | 105.4444 |
| 1 days payables outstanding | 64.4833 |
| 1 days sales outstanding | 47.9063 |
| 2 cash conversion cycle days | 90.1634 |
| 2 days inventory outstanding | 104.2857 |
| 2 days payables outstanding | 62.1486 |
| 2 days sales outstanding | 48.0263 |
| 3 accounts payable turnover | 5.3165 |
| 3 accounts receivable turnover | 6.701 |
| 3 average accounts payable | 39,500 |
| 3 average accounts receivable | 48,500 |
| 3 average inventory | 73,000 |
| 3 cash conversion cycle days | 99.1974 |
| 3 days inventory outstanding | 113.383 |
| 3 days payables outstanding | 68.6548 |
| 3 days sales outstanding | 54.4692 |
| 3 inventory turnover | 3.2192 |
| 3 operating cycle days | 167.8522 |