Am analysing a telecom and am wondering whether its good to calculate efiiciency ratios such as inventory and accounts payable ratios. If we look deeper at the payables and accrued expenses, I find that network infrastructure is a big component. This is a capital expenditure and i don’t see a link between that line item in the balance sheet and the income statement.
I was trying to forecast some lines items(inventories, accounts payable and receivables) using those efficiency ratios.
Is it a good idea to caluclate efficiency ratios ?
How would you forecast the aforementioned line items?
I’ll appreciate any suggestion.
Sam from Kenya.