Ratio Calculation

Most ratios, including Liquidity Ratios, Asset Management Ratios, Profitability Ratios, and Leverage Ratios, are dynamically calculated as needed. The two performance Ratios - Days Sales in Inventory, and Days Sales in Receivables, are calculated as part of the consolidation process.

These performance ratios are calculated as follows.

Days Sales in Inventory = (average inventory/annual cost of sales) * 365

Average inventory equals the inventory balance of the last 13 periods summed and then divided by 13.

Annual Cost of Sales equals the sum of Cost of Sales for the current period, plus the preceding 12 periods.

Days Sales in Receivables = 365/ (annual sales/average receivables)

Average receivables equals the receivables balance of the last 13 periods summed and then divided by 13.

Annual sales equal the sum of sales for the current period, plus the preceding 12 periods.

Applicable Consolidation Members

• Entity Input

• Entity Consolidation

• Elimination Adjustment (member for Ownership Management)

To improve consolidation performance, you can disable the Ratio calculations of "FCCS_Days Sales in Receivables" and "FCCS_Days Sales in Inventory" for selected scenarios if you do not use these calculations. This option is only available when the Asset Management feature is enabled.

To disable the ratio calculations:

1. On the Home page, click Application, then click Consolidation.

2. Select the Consolidation Process tab if it is not already selected.

3. From the Local Currency tab, select the Ratios calculation.

4. From the right panel, under Disabled Scenarios, click Add Scenario.

5. From Select Members, select the Scenario for which you want the calculations disabled, for example, Forecast, and click OK.

   Note that there are two lines in the Member Selector.

   • The first line is the list of Scenarios that should be disabled. Add the Scenario that you want to disable on this line.

   • The second line is an Exclusion line, which means that any Scenario listed in the second line is effectively enabled (not disabled).

6. Click Save to save the rule.

7. Re-run the consolidation process.