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QuestionsCalculation of payable days
Cecilia Lui asked 5 years ago

Hi Victor/Rusmin
SGX company is a service company and not a manufacturing company. So its cost of good sold and inventory is zero.
The formula for trade payable days = trade payable/cost of goods sold x 365 days.
so how do I find out the trade payable days for SGX?

Jieren Zheng replied 5 years ago

Just sharing my thoughts, COGS is generally used to show much it costs to make products to sell.
It is also known as cost of sales (COS), depending on if it is a product (thus called COGS) or service. COS includes all the costs directly involved in producing a product or delivering a service.
These costs can include labor, material, and shipping.
Else, every service company will end up will 100% Gross Profit Margins!

Cecilia Lui replied 5 years ago

Hi Jieren,
Thank you for sharing.

Cecilia Lui replied 5 years ago

In the case of SGX company, I am not sure which expenses should put in the cost of good sold or SGA.

Refer to their Annual Report 2016, the total operating expenses is 408.96m. Breakdown is as follows:-

Staff 159.26m
Tech. 127.85m
Processing and royalties 28.28m
Premises 24.73m
Professional fee 10.88m
Others 27.96m

what is your view? thank you

Victor Chng replied 5 years ago

Thank you Jieren :)

Jieren Zheng replied 5 years ago

Welcome :)

1 Answers
Victor Chng answered 5 years ago

Hi Cecilia,
You can use the staff and tech as the COGS

Cecilia Lui replied 5 years ago

Thanks a lot.