Hi, how should I model the CFS for the following situation (in a monthly model)? Once a month, inventory is bought CASH Products are sold on a daily basis CASH Therefore, no AR, no AP. I am unsure to model inventory and would do the following in the cash flow statement Inventory = COGS; but have a feeling this is wrong as should be modeled on "Days inventory outstanding"?

Assuming you're both buying and selling exactly $x widgets every period, then yes, INV in = INV out = COGS, so there's no net CFS effect from INV build or burn. If you wanted to use IDO to drive EoP INV, it'd have to be zero to achieve INV In = INV Out = COGS (perhaps accurate if you indeed open and close the books each month with no inventory). Or you could simply set BoP INV = EoP Inv every month and calc.

Quesiton CFS: Pay inventory cash / sell products cash

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Quesiton CFS: Pay inventory cash / sell products cash

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