Build an Inventory Forecast
Connect stock requirements with goods consumed, purchases and their cash consequences.
Stock, purchasing and cash effects · FY2026–FY2027
Preview · Illustrative values · EUR thousands / Units as labeledStock, purchases and cash
| Line item | FY2026 | FY2027 |
|---|---|---|
| Opening inventory | 560.0 | 400.0 |
| COGS cost base | 2,920.0 | 3,504.0 |
| DIO · days | 50 | 50 |
| Inventory | 400.0 | 480.0 |
| Purchases | 2,760.0 | 3,584.0 |
| Stock cash effect | 160.0 | (80.0) |
| Cash flow from operations | 621.3 | 204.0 |
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Define the stock and its cost basis
An inventory model projects goods held for future delivery or consumption. Identify what the balance represents and use a consistent cost valuation across opening stock, goods consumed and closing stock. Sales price is not the appropriate basis for a cost-valued inventory forecast.
The working-capital model connects stock with receivables and supplier balances. The working-capital guide explains its funding effect. An inventory increase is a balance movement; it does not automatically increase current-period COGS by the same amount.
Translate a stock policy into a forecast balance
On a simplified 365-day annual basis, inventory = positive COGS × DIO ÷ 365. COGS of EUR 2.92 million and 50 DIO imply EUR 400,000. Explain the target using lead times, supply reliability and delivery needs rather than assuming lower stock is always operationally feasible.
Use the DIO calculator to inspect historical inventory days or a supplied target. Historical average stock differs from a closing-balance forecast. Develop the cost/activity assumptions in the COGS model, then apply the inventory policy to that same cost basis.
Reconcile purchases with stock consumed
Without other stock movements, purchases = COGS + closing inventory − opening inventory. The preview uses EUR 560,000 opening stock, EUR 2.92 million consumed and EUR 400,000 closing stock. Purchases are EUR 2.76 million because EUR 160,000 comes from reducing existing inventory.
In the following year, COGS increases to EUR 3.504 million and closing inventory to EUR 480,000. From EUR 400,000 opening stock, purchases are EUR 3.584 million. The EUR 80,000 stock increase absorbs cash even with an unchanged 50-day assumption.
Separate purchasing from supplier payment
A purchase need not be paid immediately. The trade-payables forecast explains the supplier-credit effect on those purchases. Holding AP unchanged isolates the stock movement; changing payment terms adds a separate working-capital effect.
The preview’s 2027 purchases of EUR 3.584 million exceed supplier payments of EUR 3.536 million because payables increase by EUR 48,000. Follow this bridge into free cash flow, where operating cash is further reduced by investment. Inventory cash effects alone are not the whole liquidity forecast.
Use balances where operational evidence is more useful
An explicit stock balance can reflect a planned build before a season or a committed minimum. Explain the input and timing. Different raw-material, work-in-progress and finished-goods needs may inform named lines or external schedules; do not assume the financial model is a production or reorder optimizer.
The inventory implementation reference documents Amount and Days and the available-flow floor. A target cannot imply negative purchases or an invented stock write-off. Identify non-cash losses separately rather than interpreting every reduction as cash released through ordinary trading.
Review growth and the peak requirement
Compare stock by source period with activity and supplier terms. Annual averages or year-end stocks can miss an important seasonal peak. A finer forecast can explain when goods are acquired, sold and paid for, provided the flow basis and opening position remain consistent.
Compare lower DIO with delivery risk and growth assumptions. The cash conversion cycle supplies a timing summary, while the cash-flow reference documents the resulting signed movements. Keep purchasing, stock and payment assumptions together when assessing the plan.
Frequently asked questions
How is this different from a DIO calculator?
The calculator explores a ratio, stock target or selected cash comparison. This model rolls opening inventory, activity and purchases through future periods.
Are purchases always equal to COGS?
No. Without other movements, purchases equal COGS plus the increase in inventory, or less an inventory reduction.
Does buying stock immediately create a COGS expense?
Not necessarily. Stock can remain an asset until consumed or sold. Supplier payment timing is a separate cash question.
Can a lower target invent negative purchases?
No. The product constrains stock to available goods and does not create a disposal or write-off solely to reach an impossible target.