One of the main advantages of the alternative approach to calculating the financial cycle (CF*) is that it allows for an accurate estimate of the v...

One of the main advantages of the alternative approach to calculating the financial cycle (CF*) is that it allows for an accurate estimate of the volume of NCG as a proportion of net revenues. In this sense, suppose that TGB has a CF* of 45 days and that in the year (20X1) it has presented net revenues of $1300. Assuming that the expectation of growth in net revenues for the next year (20X2) is 60%, the expected increase in NCG (variation in NCG) would be:

The formula to calculate NCG is NCG = NCG - (CF*/360) x Net revenue (annual).
The calculation of NCG for 20X1 is 162.50.
The calculation of NCG for 20X2 is 260.
The expected increase in NCG (variation in NCG) is 97.50.
$422.50
$60.94
$162.50
$97.50
$260.00