Calculating sales and the cost of goods sold

Financial Forecasting in Python

Victoria Clark

CGMA Financial Analyst

Calculating sales and the cost of goods sold

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Financial Forecasting in Python

Calculating sales

Sales = Income = Revenue = Turnover

Data needed:

  • Sales price per unit sp_unit
  • Number of units sold units

Complexities

  • Discounts (Discounted Sales Price) d_sp
  • Credit sales
  • Sales mix sp_1 vs sp_2

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Financial Forecasting in Python

Calculating Cost of Goods Sold (COGS)

Data needed:

  • fixed_costs
    • Costs independent of units
  • Variable_costs_per_unit
    • Costs incurred per unit produced
  • Inventory opening balance inv_ob
  • Inventory closing balance inv_cb

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Financial Forecasting in Python

What does the gross profit tell us?

  • Profit margin (%)
    • gp_margin
  • Analyze the profitability of our core product
  • Calculate the break even point
break_even = fixed_costs/(sp - variable_costs)
Financial Forecasting in Python

Let's practice!

Financial Forecasting in Python

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