Formula for calculating turnover and examples

Одним из показателей, который характеризует dynamics of sales of the company, is turnover. It is calculated in sales prices. The analysis of commodity turnover gives an estimation to qualitative and quantitative indicators of work in the current period. From the conclusions drawn depends the validity of calculations for future periods. Let's consider more detailed methods of calculation of goods turnover.

Inventory turnover

All that is in the warehouse is a negotiableasset of the organization. This is frozen money. To understand how much time will take to convert goods into cash, an analysis of stock turnover is conducted.

Presence of commodity balances on the one handis an advantage. But even when they accumulate, sales are declining, organizations still have to pay taxes on inventories. In such cases, talk about low turnover. At the same time, the high speed of selling goods is not always a big advantage. With the increase in turnover, there is a risk that the customer will not find the right product and will contact another seller. To find a middle ground, you need to be able to analyze and plan the inventory turnover.

The terms

A commodity is what is bought and sold. To this category also include services, if their cost is paid by the buyer (packaging, delivery, payment for communication services, etc.).

Stocks are a list of goods suitable forsale. For organizations engaged in retail and wholesale trade, stocks are goods lying on shelves, and those that are in stock are supplied and stored.

The term "commodity stock" also includes products,which is still on the road, in the warehouse or is listed as a receivable. In the latter case, the ownership remains with the seller until the goods are paid. Theoretically, he can ship it to his warehouse. When calculating the turnover, only those products that are in the warehouse are taken into account.

Turnover is the sales volume in monetary terms, calculated for a certain period. Next, an algorithm will be described, according to which the turnover is calculated, the calculation formula.

Example 1

It is necessary to calculate the average commodity stock for six months, based on the data in the table.

Average commodity stock:

Тз ср = 278778 (6-1) = 55755.6 thousand rubles.

You can also calculate the average balances:

Osr "= (Balances at the beginning + Balances at the end) / 2 = (45880 + 39110) / 2 = 42495 thousand rubles.

Wrapping capacity and methods of its calculation

The firm's liquidity indicators depend on the speedthe transformation of funds invested in stocks, into real money. To determine the liquidity of the stocks, the ratio of commodity turnover is used. It is calculated by different parameters (cost, quantity), periods (month, year), one product or the whole category.

There are several types of turnover:

• turnover of each product in any quantitative indicators (pieces, by volume, weight, etc.);
• turnover of goods at cost;
• turnover of the entire stock in quantitative terms;
• turnover of the entire stock at cost.

In practice, most often such formulas are used to determine the effectiveness of the use of stocks:

1) The classical formula for calculating turnover:

T = (Remaining inventories at the beginning of the period) / (Monthly sales)

2) Average commodity turnover (calculation formula for the year, quarter, half-year):

T3 cp = (TZ1 + ... + T3n) / (n-1)

3) Turnover period:

OB dn = (Average turnover * Number of days in the period) / Sales volume for the period

This indicator calculates the number of days required for the sale of stocks.

4) Turnover times:

About р = Number of days / ON days = Sales volume for the period / Average turnover

This ratio shows how many turns the product makes during the period under review.

The higher the turnover, the more effective the organization’s activities, the less the need for capital, and the more stable the position of the enterprise.

5) Stock level:

Uz = (Inventory at the end of the period * Number of days) / Turnover for the period

Inventory level characterizes the security of a company with goods on a certain date. It shows for how many days the organization’s trade has enough stocks.

Features

The formula for calculating the turnover and other indicators presented above is used subject to the following conditions:

• If the organization does not have stocks, then there is no sense in calculating the turnover.
• Retail turnover, the formula for whichwill be presented below, it may be determined incorrectly if it includes targeted deliveries of goods. For example, the company won a tender for the supply of materials to the mall. Under this order was delivered a large batch of plumbing. These goods should not be taken into account when calculating the turnover.
• The calculation takes into account live stock, that is, the goods that arrived at the warehouse were sold, and those for which the remains are listed, but there was no movement.
• The turnover of goods is calculated only at purchase prices.

Example 2

Conditions for calculations are presented in the table.

Determine the turnover period in days. In the analyzed period, 180 days. During this time, 1,701 products were sold, and the average monthly balance was 328 units:

OBd = (328 * 180) / 1701 = 34.71 days

That is, an average of 35 days passes from the moment the goods arrive at the warehouse until its sale.

Calculate the turnover in times:

ON time = 180 / 34,71 = 1701/328 = 5.19 times.

For six months, the stock of goods turns around on average 5 times.

Determine the level of reserves:

Uz = (243 * 180) / 1701 = 25.71.

The organization’s inventory is enough for 26 days of work.

Purpose

Inventory turnover is analyzed in orderto find positions in which the speed of the commodity-money-commodity cycle is very low, and make the appropriate decision. To analyze goods of different categories in this way does not make sense. For example, in a grocery store a bottle of brandy can be sold at a faster rate than a loaf. But this does not mean that bread should be excluded from the range of products. Just analyzing these two categories in this way is not necessary.

Compare the following products within onecategories: bread - with other bakery products, and brandy - with elite alcoholic beverages. Only in this case, you can draw conclusions about the intensity of the turnover of a particular product.

Analysis of sales dynamics in comparison with the pastperiods will lead to a conclusion about the change in demand. If during the analyzed period the turnover ratio decreased, then there is a glut of storage. If the indicator is growing and, moreover, at a fast pace, then it is a question of working “from the wheels”. In the conditions of a shortage of goods, stocks may be zero. In this case, inventory turnover can be calculated in hours.

If there are seasonal goods in stock,If there is a low demand, then it will be hard to achieve turnover. We'll have to buy a wide range of rare goods, which will affect their liquidity. Therefore, all calculations will be incorrect.

It is also important to analyze the terms of delivery.If the organization purchases at its own expense, then the calculation of turnover will be indicative. If goods are bought on credit, then low turnover is not critical for the company. The main thing is that the repayment period does not exceed the calculated coefficient value.

Types of turnover

Similarly, prices are divided into retail andwholesale, the turnover is divided into two similar types. In the first case we are talking about the sale of goods for cash or at standard prices, and in the second - about sale by bank transfer or at wholesale prices.

Methods

In practice, the following methods of calculating the turnover:

• Based on the consumption of goods by residents of the same area.
• According to the planned number of sales and the average unit cost.
• According to the actual turnover of the organization (the most popular method).

Data for calculations are taken from the accounting, statistical reporting.

Dynamics

The following formula for calculating turnover shows the change in current prices:

D = (The fact of turnover of the current year / The fact of turnover of the last year) * 100%.

The dynamics of turnover in comparable prices is determined by the following formula:

D cop = (The fact of commodity turnover in comparable prices / The fact of commodity turnover of the last year) * 100%.

Example 3

It is necessary to calculate the dynamics of turnover and the percentage of implementation of the sales plan. There is such data:

- The turnover of 2015 - 2.6 million rubles.
- Sales forecast for 2016 - 2.9 million rubles.
- Trade in 2016 - 3 million rubles.

Decision:

- Determine the percentage of completion of the sales plan: (3 / 2.8) * 100 = 107%.
- We will calculate the turnover in current prices: (3 / 2,6) * 100 = 115%.

Price Index

If during the study period prices have changed, thenYou must first calculate their index. The value of this indicator increases in terms of the influence of inflationary processes on the country's economy. The coefficient shows the change in the value of a certain amount of goods for the period. The formula for calculating the price index:

Its = C new / C old

This formula is often used by statistical bodies.to analyze the level of prices for certain categories of goods. For example, the volume of goods sold in 2014 was 100 thousand rubles, and in 2016 - 115 thousand rubles. Calculate the price index:

Its = 115/100 = 1.15, that is, over the year prices have increased by 15%.

Only after these actions is used the formula for calculating the turnover in comparable prices:

Fact = (Commodity turnover in current prices / Commodity turnover last year) * 100%.

Example 4

In 2015, the company's turnover amounted to 20 million rubles, and in 2016 - 24 million rubles. During the reporting period, prices rose by 40%. It is necessary to calculate the turnover on the formulas presented earlier.

Determine at current prices wholesale turnover. The formula for calculating:

Tm = 24/20 * 100 = 120% - for the current year the turnover increased by 20%.

Calculate the price index: 140% / 100% = 1.4.

We define the turnover in comparable prices: 24 / 1.4 = 17 million rubles.

The formula for calculating the turnover in the dynamics: 17/20 * 100 = 85%.

The calculation of the dynamics showed that growth occurredonly by increasing prices. If they had not changed, the turnover would have been reduced by 17 million rubles. (15%). That is, there is a rise in prices, not the quantity of goods sold.

Example 5

The initial data for the assignment are presented in the table below.

Now you need to determine the turnover for the current year at the prices of the past period.

First, we determine the percentage of completion of the sales plan: 5480/5300 * 100 = 103.4%.

Now you need to determine the dynamics of turnover in percent in comparison with 2015: 5480/4650 * 100 = 120%.

As a result of over-fulfillment of the sales plan in 2016, the company sold products for 180 thousand rubles. more. Over the year, sales increased by 920 thousand rubles.

Detailed calculation of retail turnoverQuarters allows you to determine the uniformity of sales, to identify the degree of satisfaction of demand. Additionally, it is also worth analyzing sales by month to establish signs of a decline in demand.

The formula for calculating the turnover in retail

Analysis of price changes by product groupsprovides for the quantitative and valuation of individual goods, the definition of the dynamics of their shifts. The results of the study are used to examine the relevance of supply to demand and influence the formation of orders.

The analysis of trade is conducted on quarterly and annual reports. Based on the results of the audit, it is possible to establish the reasons for which the turnover has changed. The calculation formula for the balance sheet is shown below:

Zn + Nt + Pr = P + B + B + U + Zk, where
Zn (k) - stocks at the beginning (end) of the planning period;
NT - commodity premium;
Pr - the arrival of goods;
Р - sale of goods in separate groups;
B - disposal of goods;
B - natural decline;
U - markdown.

Determine the degree of influence of balance sheet indicatorsby calculating the difference between planned and actual indicators, or using the method of chain substitutions. At the next stage, the retail turnover, the formula for calculating which was presented above, is analyzed for changes as a result of improved labor productivity, an increase in the number of employees and the efficiency of the use of fixed assets. The analysis is completed by determining the prospects for growth in sales and changes in the structure of goods.