Monthly Inventory Closing Report: Project A

⚠ DATA QUALITY ALERT: READ BEFORE INTERPRETING: This report contains material data gaps that affect the reliability of the consolidated closing balance. (1) San José week-4 COGS is unbooked: closing balance per physical count only; ₡700,000 CRC ledger gap disclosed in Section 0. (2) Managua COGS weeks 1–2 and 4 are missing; closing balance is preliminary and subject to restatement. (3) San José week-2 COGS was estimated, not actual. All reported figures must be treated as provisional until a full COGS reconciliation is completed. Panama City data is clean and confirmed.

Section 0

Warehouse Consolidation Bridge

All three locations operate in different local currencies. The figures below convert each location's closing inventory to CRC and USD using the October 2025 declared FX rates before rolling up to a consolidated group balance. Two locations carry material data quality issues that affect the reliability of this bridge: disclosed explicitly below.

FX Rate Reference: October 2025 Close

Currency Pair	Rate	Source	Prior Month Rate (Sep 30)	Rate Movement
NIO → CRC	1 NIO = 14.35 CRC	Banco Central de Nicaragua (BCN)	1 NIO = 14.28 CRC	CRC weakened vs NIO (+0.07)
USD → CRC	1 USD = 518 CRC	Banco Central de Costa Rica (BCCR)	1 USD = 516 CRC	CRC weakened vs USD (+2.00)
PAB → CRC	1 PAB = 518 CRC	PAB pegged 1:1 to USD	1 PAB = 516 CRC	CRC weakened vs PAB (+2.00)

Per-Location Bridge: October 2025 Closing Balances

Location	Local Currency	Closing Value (Local)	FX Rate Applied	CRC Equivalent	USD Equivalent	Data Quality Status
San José: Almacén Central	CRC	170,500,000	1.0000	170,500,000	329,151	WARNING Physical count confirmed; week-4 COGS unbooked
Managua: Bodega Norte	NIO	1,664,000	14.35	23,878,400	46,097	CRITICAL PRELIMINARY: COGS wks 1–2 & 4 missing; subject to restatement
Panama City: Depósito PTY	PAB	114,600	518.00	59,362,800	114,600	CLEAN Physical count 22/10: zero variance confirmed
Consolidated Group Total: October 2025				253,741,200	489,848

Reconciliation Gap: San José (CFO Disclosure Required):
The ledger-computed closing balance for San José is ₡169,800,000 CRC. The physical count confirmed by the external counter (ADV-OCT-2025) is ₡170,500,000 CRC. The gap of ₡700,000 CRC (≈ USD 1,351) is attributable to week-4 COGS that was invoiced in billing but not booked to inventory cost at cut-off. This is not a physical shrinkage: it is an unbooked COGS transaction. The closing balance used in this report reflects the physical count figure. The ledger must be corrected before November opening balance is carried forward.

⚠ Managua: ESTIMATED ONLY (COGS Gaps Prevent Full Verification):
The Managua closing balance of 1,664,000 NIO (₡23,878,400 CRC / USD 46,097) is a preliminary warehouse estimate. COGS for weeks 1–2 were not submitted (data arrived 5 days late, exceeding the Project A 2-day threshold). COGS for week 4 was not submitted by the warehouse manager. Only week-3 partial COGS of 65,000 NIO is confirmed. The true closing balance cannot be verified until full COGS reconciliation is completed. All Managua figures in this report are ESTIMATED ONLY and must be treated as provisional.

Section 1

Executive Summary

Consolidated Closing Balance

₡253.7M

USD 489,848

October 31, 2025

Month-over-Month Change

+₡4.7M

+USD 9,021

▲ +1.9% vs September 2025

Slow-Moving Exposure

₡27.4M

USD 52,882 · 10.8% of portfolio

▼ 9 items >60 days no movement

Est. Write-Off Exposure

₡8.2M

USD 15,865 · conservative 30%

▼ Provision recommended

⚠ AMBER

Overall Financial Health Signal: AMBER. Inventory working capital increased modestly by 1.9% month-over-month, which is not alarming in isolation. However, this report carries two material data integrity issues that prevent a CLEAN rating. First, San José week-4 COGS is unbooked, creating a ₡700,000 ledger gap that must be corrected before the November close. Second, Managua's closing balance of ₡23.9M CRC (9.4% of the group portfolio) is a preliminary estimate: COGS gaps for three out of four weeks mean the true balance is unverifiable. Additionally, 10.8% of total inventory value (₡27.4M CRC) has not moved in over 60 days, representing a write-off exposure that warrants a provision review. Panama City is fully clean and reconciled.

Section 2

Inventory Value Movement

San José: Almacén Central (CRC)

Movement Item	CRC	USD	Notes
Opening Balance: Sep 30, 2025	168,000,000	324,324	Carry-forward confirmed
Purchases / Goods Receipts	24,000,000	46,332	PO-1041 Bebidas + PO-1042 Cuidado Personal + PO-1045 Alimentos. PO-1051 excluded: amount unconfirmed.
COGS / Goods Issues (Booked)	(21,500,000)	(41,506)	PARTIAL Wks 1–3 actual + wk-2 estimated; wk-4 unbooked
Inventory Adjustments	(700,000)	(1,351)	ADJ-201 physical shortage ₡320K + ADJ-209 storm damage ₡380K
Ledger Computed Balance	169,800,000	327,799	Before physical count reconciliation
Closing Balance: Oct 31 (Physical Count)	170,500,000	329,151	WARNING Per counter ADV-OCT-2025; ₡700K gap = unbooked wk-4 COGS
MoM Change	+2,500,000	+4,826	+1.5% vs September opening

Managua: Bodega Norte (NIO → CRC)

Movement Item	NIO	CRC (×14.35)	USD	Notes
Opening Balance: Sep 30, 2025	1,630,000	23,390,500	45,155	Carry-forward confirmed
Purchases / Goods Receipts	247,000	3,544,450	6,844	PO-MGA-088 + PO-MGA-091 + PO-MGA-097
COGS / Goods Issues (Booked)	(65,000)	(932,750)	(1,801)	CRITICAL Week-3 partial only; wks 1–2 & 4 missing
Closing Balance: Oct 31 (PRELIMINARY)	1,664,000	23,878,400	46,097	PRELIM Warehouse estimate; subject to restatement
MoM Change (CRC basis)	+34,000	+487,900	+942	ESTIMATED: not reliable until COGS reconciled

Panama City: Depósito PTY (PAB → CRC)

Movement Item	PAB	CRC (×518)	USD	Notes
Opening Balance: Sep 30, 2025	112,000	57,792,000	112,000	Carry-forward confirmed
Purchases / Goods Receipts	17,800	9,220,400	17,800	PO-PTY-031 (Zona Libre Colón) + PO-PTY-034
COGS / Goods Issues	(15,200)	(7,873,600)	(15,200)	Wks 1–2 actual (El Machetazo + Super 99)
Closing Balance: Oct 31 (Confirmed)	114,600	59,362,800	114,600	CLEAN Physical count 22/10: zero variance
MoM Change (CRC basis)	+2,600	+1,570,800	+2,600	+2.3%: driven by net purchase activity

Consolidated Group Movement: October 2025

Location	Sep Closing CRC	Oct Closing CRC	MoM Change CRC	MoM Change USD	% Change	Status
San José	168,000,000	170,500,000	+2,500,000	+4,826	+1.5%	PARTIAL
Managua	23,276,400	23,878,400	+602,000	+1,162	+2.6%	PRELIM
Panama City	57,792,000	59,362,800	+1,570,800	+3,033	+2.7%	CLEAN
Group Total	249,068,400	253,741,200	+4,672,800	+9,021	+1.9%	PROVISIONAL

Section 3

Working Capital Impact

Cash tied in inventory increased by ₡4,672,800 CRC (USD 9,021) month-over-month, a 1.9% rise. This reflects net purchase inflows exceeding COGS at all three locations. Days Inventory Outstanding (DIO) is computed using the prior-month (September) full-period COGS as denominator, since October COGS is incomplete across two of three locations. The DIO figures below are therefore indicative rather than final.

Location	Sep Closing WC (CRC)	Oct Closing WC (CRC)	WC Change (CRC)	WC Change (USD)	DIO Sep (days)	DIO Oct (days)	DIO Signal
San José	168,000,000	170,500,000	+2,500,000	+4,826	23	23.3	STABLE
Managua (ESTIMATED)	23,276,400	23,878,400	+602,000	+1,162	20	20.5	ESTIMATED
Panama City	57,792,000	59,362,800	+1,570,800	+3,033	11	11.3	STABLE
Consolidated	249,068,400	253,741,200	+4,672,800	+9,021	18.1	18.5	STABLE

DIO is marginally higher across all locations (+0.3 to +0.5 days), consistent with the slight inventory build. There is no DIO deterioration signal on a like-for-like basis. The primary working capital risk this month is not turn velocity: it is the slow-moving portfolio addressed in Section 4.

Section 3b

FX Impact on Working Capital

The CRC depreciated slightly against both the NIO and USD/PAB between September 30 and October 31, 2025. This rate movement inflates the CRC-reported value of non-CRC inventory when translated at October closing rates. The table below isolates the FX rate effect from the volume effect (actual inventory movement) for Managua and Panama City.

Location	Closing (Local)	At Oct FX (CRC)	At Sep FX (CRC)	FX Rate Effect (CRC)	FX Rate Effect (USD)	Driver
San José (CRC)	170,500,000 CRC	170,500,000	170,500,000	,	,	No FX translation: native CRC
Managua (NIO)	1,664,000 NIO	23,878,400	23,761,920	+116,480	+225	Rate effect only (NIO balance unchanged in local terms: volume effect minimal)
Panama City (PAB)	114,600 PAB	59,362,800	59,133,600	+229,200	+442	Rate effect only (PAB balance confirmed by physical count: volume effect is real purchase/COGS activity)
Total FX Rate Impact on Closing WC (Oct vs Sep rates)				+345,680	+667

Of the total ₡4,672,800 CRC month-over-month working capital increase, approximately ₡345,680 CRC (7.4%) is attributable to FX rate movement rather than actual inventory volume change. The remaining ₡4,327,120 CRC (92.6%) reflects genuine inventory build across all three locations driven by net purchases exceeding COGS. FX exposure to date is immaterial at the group level, but the CRC depreciation trend should be monitored if it continues into Q4 2025.

WC Movement Attribution	CRC	USD	% of Total MoM Change
Volume effect (inventory build, net purchases)	4,327,120	8,354	92.6%
FX rate effect (CRC depreciation vs NIO and PAB/USD)	345,680	667	7.4%
Total MoM WC Change	4,672,800	9,021	100.0%

Section 4

Write-off and Obsolescence Risk

Slow-moving threshold: 60 days without movement: Project A group-wide threshold applied to all locations and categories. Managua items flagged ESTIMATED where last movement date is unverifiable due to COGS data gaps.

Item Code	Description	Location	Category	Days Idle	Value (Local)	Value (CRC)	Value (USD)	Estimated?
SJ-AL-0112	Aceite vegetal galón ×4	San José	Food	91	5,100,000 CRC	5,100,000	9,846	NO
SJ-CP-0078	Shampoo anticaspa 400ml	San José	Personal Care	101	2,800,000 CRC	2,800,000	5,405	NO
SJ-CP-0091	Desodorante roll-on hombre	San José	Personal Care	72	3,600,000 CRC	3,600,000	6,950	NO
SJ-BV-0041	Bebida energética lata 250ml	San José	Beverages	77	4,200,000 CRC	4,200,000	8,108	NO
SJ-AL-0134	Atún en lata 170g ×24	San José	Food	62	2,500,000 CRC	2,500,000	4,826	NO
MGA-001	Arroz blanco 25kg saco	Managua	Granos	82	120,000 NIO	1,722,000	3,324	ESTIMATED
MGA-017	Frijoles negros 50kg	Managua	Granos	93	73,000 NIO	1,047,550	2,022	ESTIMATED
PTY-044	Detergente industrial 5L	Panama City	Cleaning	70	8,400 PAB	4,351,200	8,400	NO
PTY-061	Jugo concentrado naranja	Panama City	Beverages	87	4,000 PAB	2,072,000	4,000	NO
Total Slow-Moving Inventory						27,392,750	52,882
As % of Consolidated Portfolio						10.8%
Est. Write-Off Exposure (30% conservative provision)						8,217,825	15,865

San José accounts for ₡18,200,000 CRC (66% of slow-moving exposure) across five product lines. Shampoo anticaspa (SJ-CP-0078) at 101 days idle is the most at-risk item: at this stage, category-level markdown or supplier return negotiation should be evaluated. The aceite vegetal (91 days) and bebida energética (77 days) warrant provisioning at a minimum.

Panama City carries PTY-044 industrial detergent at USD 8,400 (70 days) and PTY-061 orange juice concentrate at USD 4,000 (87 days). The juice concentrate carries perishability risk beyond the standard slow-moving flag: physical condition should be confirmed immediately.

Managua items (MGA-001 and MGA-017) are flagged ESTIMATED because last movement dates cannot be verified due to the COGS data gaps. The ₡2,769,550 CRC combined value should be treated as a provisional slow-moving figure pending full reconciliation.

Recommended action: Provision ₡8,217,825 CRC (USD 15,865) as a conservative write-off reserve this period. For the shampoo, aceite, bebida energética, and orange juice concentrate: initiate a liquidation or markdown review with the commercial team. Detergente industrial (PTY-044) and frijoles negros (MGA-017) at 93 days should move to active disposition within November.

Section 5

CFO Action Items

Managua COGS Reconciliation: Materially Unverified Balance

Issue: COGS for weeks 1–2 and 4 not received; Managua closing balance of ₡23,878,400 CRC (USD 46,097 / 9.4% of group portfolio) is a warehouse estimate with no ledger verification. → Financial Impact: The true closing balance may differ materially from the reported figure; November opening balance cannot be carried forward reliably; any overstated closing balance flows directly to understated COGS and inflated gross margin in the P&L. → Recommended Action: Require warehouse manager to submit all missing COGS data within 5 business days. Complete ledger reconciliation and restate the October Managua balance before the November close runs.

San José Week-4 COGS: ₡700,000 Ledger Gap Correction Required

Issue: INV-8877 (Distribuidora Walmart CR) was invoiced in billing but COGS was not booked to inventory cost at October cut-off, creating a ₡700,000 CRC gap between the ledger-computed balance (₡169,800,000) and the physical count (₡170,500,000). → Financial Impact: Without the correcting COGS entry, COGS is understated by ₡700,000 and gross margin is overstated by the same amount in October. The November opening balance will be misstated if not corrected now. → Recommended Action: Post the COGS correcting journal for INV-8877 before November 1 opening. Confirm with external counter (ADV-OCT-2025) that the physical figure of ₡170,500,000 is the authoritative closing balance.

Slow-Moving Portfolio: ₡8.2M CRC Provision and Disposition Review

Issue: ₡27,392,750 CRC (USD 52,882 / 10.8% of total inventory) has not moved in over 60 days across all three locations. Five items exceed 75 days; two exceed 90 days. → Financial Impact: At a conservative 30% write-off rate, balance sheet exposure is ₡8,217,825 CRC (USD 15,865). Items approaching or exceeding 90 days without a disposition plan will require a larger provision in subsequent periods. PTY-061 orange juice concentrate carries additional perishability risk that may make the 30% provision rate optimistic. → Recommended Action: Book a ₡8,217,825 CRC write-off provision in October. Present the full slow-moving list to the commercial team for markdown authorization or supplier return negotiations by November 15. Verify physical condition of PTY-061 immediately.

Assumptions and Methodology

Exchange rates: NIO → CRC at 14.35 (BCN, Banco Central de Nicaragua); USD/PAB → CRC at 518 (BCCR, Banco Central de Costa Rica); PAB pegged 1:1 to USD. Prior month (Sep 30) rates: NIO = 14.28, USD/PAB = 516. FX rates are declared rates embedded in the dataset: not independently verified as of report preparation date.
COGS basis: San José: weeks 1 and 3 actual; week 2 estimated (flagged WARNING in source data); week 4 unbooked at cut-off. Managua: week 3 partial only; weeks 1–2 and 4 missing (CRITICAL). Panama City: weeks 1–2 actual; confirmed. October COGS is materially incomplete for two of three locations.
DIO methodology: DIO calculated as (closing inventory value / implied monthly COGS) × 30. The monthly COGS denominator is derived from the September 2025 full-period COGS implied by the dataset-reported Sep DIO figures, since October COGS is incomplete. DIO figures are indicative only.
Closing balance basis: San José: physical count (ADV-OCT-2025) ₡170,500,000 CRC, confirmed. Managua: preliminary warehouse estimate 1,664,000 NIO, subject to restatement. Panama City: physical count October 22, 114,600 PAB, zero variance confirmed.
Slow-moving threshold: 60 days without movement: Project A group-wide threshold applied uniformly across all locations and product categories. Managua items (MGA-001, MGA-017) flagged ESTIMATED because last movement dates cannot be verified due to COGS data gaps.
Write-off provision: 30% of total slow-moving value applied as a conservative estimate. Actual write-off rates will depend on commercial team's assessment of liquidation value and physical product condition, particularly for perishable items.
PO-1051 exclusion: Importadora del Norte purchase (San José, Cuidado Personal) excluded from the ledger and this report: amount unconfirmed pending supplier confirmation, per source data CRITICAL flag.
Data completeness by location: Panama City: CLEAN (100%); San José: PARTIAL (week-4 COGS gap, physical count authoritative); Managua: CRITICAL (COGS weeks 1–2 and 4 missing, balance ESTIMATED ONLY).