We’ll now move on to a modeling exercise, which you can access by filling out the form below. A/P Days Calculator – Excel Model Template In most cases, however, using the ending balance does not make a significant enough difference unless there was a drastic change in the business model and efficiency of the company across the period. Therefore, the average balance of accounts payable is the most accurate approach to align the timing mismatch. More specifically, the income statement measures a company’s financial performance across a period, whereas the balance sheet is a “snapshot” at a specific point in time. Since COGS is a line item on the income statement, while the accounts payable line item comes from the balance sheet, there is a mismatch in timing as the two financial statements cover different periods.
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