How can I increase the turnover?
When the company wishes to increase turnover, it most likely means sales or stocks. These two commercial items are very close and a clear relationship in the company. Increasing sales and stock turnover means that the company earns higher sales and sells through its inventory several times in a single period. Ways to increase turnover can be discounting products of products, enter new markets and reduce stocks held for sale of companies. Each of these methods provides a specific way of improving the turnover of the company. Companies
use a standard formula to calculate stock turnover. The formula divides the sale of inventory for the current period. In most cases, the accountant calculates this formula monthly. However, the formula also works every year. The profit and loss statement and balance sheet holds basic information for the formula, with sale in the profit and loss statement and inventory in the balance sheet.
Demand is the main factor that manage the company. When consumer demand begins to lag behindCompany products can offer price discounts to increase sales. Finally, this option will reduce the company's profitability at the product level. This option increases the turnover because the company increases profit from volume sales rather than less sales with higher profits per unit. However, the increase in sales will increase the company's turnover.
The second option for increasing turnover is to enter new markets. Many companies begin with the work on local markets with immediate groups of consumers. Over time, however, sales may decrease because an immediate group of consumers already own products of the company. The sale will drop and the turnover begins to decrease. Admission to new markets allows companies to sell products in other countries, regions or international places, which increases the trail of the company.
New brands usually lead to higher total sales. The company's customer base will increase the turnover,Because the new sales are increased by the numerator of the stock turnover ratio. One in -view is the cost of inventory for each new market. In some cases, society may have to spend more capital on stocks that are reduced to the turnover ratio. Any cost increase must compensate for increased sales to increase the turnover.
The final possibility of increasing turnover is to reduce the stocks the company keeps in its warehouses. Lower dollar amounts will be reduced by the denominator of the inventory turnover. Companies can reduce the inventory of the implementation of the Just-in-Time system that orders supplies as needed. Another option is to constantly check the sale of inventory to ensure that your hand inventory meets sales requirements rather than exceeding sales.