|
How Much Is a Vendor Discount Worth? |
|||||||
|
If you have the cash flow available to pay on discount date… |
If you borrow from line of credit to pay on the discount date… |
If you withdraw savings to pay on the discount date… |
|||||
|
Discount % |
Annual interest rate charged on borrowed funds |
Annual interest rate paid on savings account deposit |
|||||
|
Days between end of discount period and end of net period |
Invoice amount less discount |
$0.00
|
Invoice amount less discount |
$0.00
|
|||
|
Invoice Amount |
Borrowing costs |
$0.00
|
Opportunity Cost (Interest lost) |
$0.00
|
|||
|
Discount Amount |
$0.00
|
Net Effect of Discount Amount less Borrowing Costs |
$0.00
|
Net Effect |
$0.00
|
||
|
Assumes loan is repaid at invoice due date |
Assumes withdrawal is redeposited at invoice due date |
||||||
|
Effect On Company Profitability of Taking Vendor Discount |
|||||||
|
Per Project: |
Per Year: |
||||||
|
Average project size in $$ |
Total Sales ÷ Total # Projects |
Number of projects per year |
|||||
|
Cost of Goods Sold (COGS) as percent of Sales |
COGS ÷ Total Sales |
Value of discount per project |
$0
|
||||
|
Materials as a percent of COGS |
COGS% - Subcontractors% - Direct Labor% |
||||||
|
Percent of materials purchases on which discount is offered |
Not all suppliers offer discount |
Additional Profit Per Year= |
$0
|
||||
|
Average discount per cent offered |
Suppliers usually offer discounts of 1%-5% |
||||||
|
Value of discount per project |
$0
|
||||||
|
PRINT: Landscape, Margins=Minimum, Scale=Default |
|||||||