This is an Optimal Purchase Calculator. It helps the user to work out the maximum profit margins by calculating prices of bought and sold goods.
Ready-to-use, this Excel file is available to download instantly.
This MS Excel template contains a financial model used for comparing up to five purchase options of inventory with different purchasing conditions. The different purchasing conditions include:
- Number of item units bought: the number of items purchased for each of the options;
- Price per unit: the cost of one item given the aforementioned volume of each purchase;
- Total Transportation expenses: the total cost of transportation per purchase;
- Customs duties: the cost of the customs duties payable per each purchase (if applicable);
- Deferred payment to the supplier: the number of days for which suppliers allow the payment for goods purchased to be deferred.
Furthermore, the model also takes into account the cost of money "frozen" in the inventory based on the company's required cost of capital and average monthly sales. The option with the final lowest price of one unit of inventory is presumed to be the most profitable option.
After you specify the aforementioned assumptions, the model will automatically indicate the most profitable option and highlight it in green.
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