Calculating accounts payable (creditors)
Now we will look at a scenario where we are the ones being granted credit. This means that we can buy something, but only have to pay for this amount later.
In this exercise, T-Z needs to buy nuts and bolts to produce 1000 units in January and 1200 units in February. The cost of nuts and bolts per unit is 0.25 USD. The credit terms are 50% cash upfront and 50% in 30 days.
Therefore, the creditors' value, in this case, would be paid the month directly after. This means that the creditors' value would only reflect the current month's credit purchases.
This exercise is part of the course
Financial Forecasting in Python
Exercise instructions
Set the cost per unit.
Create the list for production
production
including the unit amounts for January and February, as well as an emptycreditors
list.Calculate the accounts payable
creditors
for January and February.- To do this, use the
.append()
method for each quantity of units (mvalue
) inproduction
, multiplied by the unit cost and credit terms (0.5).
- To do this, use the
Print the
creditors
balance for January and February.
Hands-on interactive exercise
Have a go at this exercise by completing this sample code.
# Set the cost per unit
unit_cost = ____
# Create the list for production units and empty list for creditors
production = [____,____]
creditors = ____
# Calculate the accounts payable for January and February
for mvalue in ____:
creditors.____(mvalue * ____ * 0.5)
# Print the creditors balance for January and February
print("The creditors balance for January and February are {} and {} USD.".format(____[0], ____[1]))