## Balance Sheet query

ajay190
Posts: 2
Joined: Tue Sep 11, 2012 12:29 pm

### Balance Sheet query

Hi All,

I have below query in Q_Valuation_Case_v4 sheet Balance sheet tab in some places I see =Assumptions!J17*('P&L'!J11/365)*2-BS!I12 formulae is used .Could you please advise why we have to multiply 2 and substract it form prevoius year.Also please advise when to use this logic of multiply by 2 and subsctract by previous year as i do not see this to all balances sheet items this logic is used.

Thankyou,
-Ajay Agarwal.

anilbains
Posts: 1
Joined: Fri Sep 14, 2012 6:20 pm

### Re: Balance Sheet query

Ajay, the balance sheet numbers are as on date, these numbers do not represent the values throughout the year but on a particular date. To calculate the mixed ratios, which involve the P&L items and BS items, we need to take the number that would be more appropriate through out the year. So we take the average of the beginning and the ending of the year numbers.
Now, suppose I have taken a mixed ratio considering the average of Balance Sheet values, and then projected the ratio. To use the projected ratio to calculate the balance sheet item, I need to multiple with 2 and then subtract the last year's value.
For Example: I have Rev(10), Rev(11) as the revenue of FY 10 and FY (11).
I(10),I(11) as inventory for FY 10 and FY 11.
So the Inventory # of Days = [I(10)+I(11)]/[2*Rev(11)]*365 for FY(11).
Now, if the Inventory # of Days for FY 11 were given to us, then I(11) would be
= 2*(Inventory # of Days)*Rev(11)/365-I(10) just writing I(11) in terms of other terms.
Hope this answers!! Feel free to write back in case of any other query.

Gabrieloi
Posts: 1
Joined: Mon Feb 15, 2016 5:46 pm
Location: WakSciereemer
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### Balance Sheet query

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