Inventory: oscillating?
Hey guys,
I've got some trouble modelling the inventory of a retail (softline) company. From CapIQ, I could get an estimate of the inventory turnover (~3) and I started using the "basic" formula: IT = 2*COGS/(ending + beginning inv.)
But when I project out the balance sheet using this formula (and the fact that beginning inv @ N+1 = ending inv @ N), it results in an inventory which oscillates like crazy around the general trend. This is weird, and I can't really come up with a convincing explanation...
Have you guys already seen that? What's your advise on that? What's the common way of modelling inventories?
Thanks





bump Or maybe someone would
bump
Or maybe someone would be willing to share a model for a softline retailer?