Product turnover is the ratio of the rate of sales of a product to the average stock for a certain period. In other words, this is the period of time for which the average stock of goods in the warehouse is sold, and, therefore, the time to return the money invested in production.
Instructions
Step 1
You can calculate the turnover of goods in days or times. In the first case, the turnover shows how many days it takes to sell the average inventory. It is defined as the ratio of the product of the average inventory and the number of days in a month to the turnover for this period. For example, the average inventory of laundry detergent was 160, and sales were 320. This means that the turnover will be: 160 * 31/320 = 15, 5 (days), i.e. it takes 15.5 days to sell the average stock of this powder.
Step 2
Please note that the turnover indicator alone does not provide any conclusions. It is analyzed in dynamics, for example, if the turnover was 10 days, but it became 15, then this suggests that it is necessary to reduce the amount of imported goods or increase sales. If, on the contrary, this indicator decreased, the goods began to turn around faster.
Step 3
Estimate the ratio of the turnover in days and the term of the loan for the product. If the loan is provided for 30 days, and the turnover period is 15 days, it means that during this period we will return the invested funds and will be able to pay off the debt. If the loan was provided for 10 days, and the turnover was 15 days, then we will have to use borrowed money to return the loan, since investments in the goods will not be returned yet.
Step 4
Another conclusion that you can draw from turnover is to estimate the frequency of replenishment of the stock. With a product turnover of 15 days, the stock must be replenished twice a month.
Step 5
The turnover rate in times indicates how many times the product has turned around during the period, i.e. was sold. It is calculated as the ratio of turnover for a period to the average stock of goods for that period. For example, the stock of washing powder was 160 pieces, and sales - 320 pieces, which means that the turnover will be equal to: 320/160 = 2, i.e. The stock of goods will be fully sold twice a month.
