Inventory Carrying Cost Calculator: Fill & Download for Free

This is a traditional way to do financial projections.Once you've done enough research to produce your first estimates (startup costs, CAPEX, running costs, potential sales /revenue...):First of all, list all your numeric assumptions on your first sheet, so that every other sheet can link to them, and you only have to change values once each time you need to.Then start with Profit and Loss for 5 years. Two scenarios (positive and negative) and a simple breakeven analysis. This makes you understand your assumptions and gives you the basics: estimated profit, Earnings Before Interest Tax Depreciation and Amortization, margins etc.Produce projected cash flows (5 years). Sometimes projected balance sheets are also asked, so investors can see potential future snapshots of the health of your business.Use Discounted Cash Flows, find the Net Present Value of your start-up, your Internal Rate of Return on your investment, and Return on Equity. This will be be useful when comparing your idea with other options.Find your peak cash requirement, to know how much money you'll need to set aside. Working capital alone could easily be 3-4 months of fixed costs. This varies considerably depending on your business model (e.g. whether clients pay upfront)If you decide take on debt, find out ratios such as how many times your earnings cover your debt capital repayment and interest.Estimate your cost of customer acquisition and your customer lifetime value (CLV). This will lead you to estimate the customer retention rate and dollar retention rate.If you are looking for investors and/or lenders, work out your capital structure. Show potential investors exactly what your financial need is and how they will benefit from sponsoring your start-up.Do sensitivity analyses to see how your start-up will respond to 'stress tests' - things that can go wrong.Key elements such as marketing and sales projections, amortisation, etc. should be detailed in separate sheets. Anything that is particularly meaningful. For example, if your business will have considerable inventory, inventory and inventory carrying costs should be listed separately.Don't forget other important aspects of a business plan, especially market and competition research, SWOT analysis and risk analysis. If you know your weaknesses, you can mitigate them instead of letting them pull you down.This might seem like a lot of work, but it's really pretty straightforward, and makes a difference.To be done in conjunction with real studies and advances 'in the field' though! This is the most important.Good luck

The Formula for EOQ is: (EOQ)= Square root of [ 2D*k/h], where D is the annual demand for the product,K is per order cost and h is the inventory carrying cost.

It is nothing but the total cost of inventory held by an organization.For example,You sell 2 products A & B in your storeIf A costs 10$/unit and you hold 30 units with you & B cost 5$/unit and you hold 100 units with you.Then,Total inventory value would be= value of A+ value of B+ Inventory carrying costValue of A= 30 units*10$/unit= $300Value of B= 100 units* 5 $/unit= $500Inventory carrying cost maybe anything you spend on inventory like rent of the shelves space in a store or maintenance cost of the equipment used to handle inventory or taxes,depreciation etc..Add up all of these to get the inventory value.Inventory value is usually calculated end of each period of time which vary from organisation to organisation.