Stock Turnover Ratio & Stock Pressure is a metrics of supply chain analytics. These both ratio shows the how much stock is available for how long days & how much inventory should be stocked. It help to manage the stock the different category of the product and also help to keep the availability of stock as per requirement. Thank You.
Stock turnover ratio shows the relationship between costs of goods sold and the average inventory. It helps to know how efficiently the investments in inventory is converted to sales. This technique helps to eliminate overstock issues. Low stock turnover indicates weak sales and overstock. Higher ratio implies high sales and high profits. Stock pressure helps to understand whether our product is under stocked or overstocked in the stores as compared to our competitors. By calculating stock pressure,we can determine safety stock levels in supply chain system to achieve high customer service level while operating with low inventory and high sales
STR shows how effectively the company's interest in inventories is changed over to deals and along these lines delineates the stock administration abilities of the association. It is both a movement and effectiveness proportion. This proportion decides stock related issues, for example, overloading and overvaluation. High Ratio - If the stock turnover proportion is high it indicates more deals are being made with every unit of interest in inventories. Despite the fact that high is ideal, a high proportion may demonstrate a deficiency of working capital and absence of adequate inventories. Low Ratio - A low stock turnover proportion may demonstrate superfluous gathering of stock, wasteful utilization of speculation, over-interest in inventories, and so forth. This is a worry for the organization as stock could end up out of date and may result in future misfortunes.
Stock turnover ratio and Stock pressure, indicates how efficiently the firm’s investment in inventories is converted to sales, and is very crucial for understanding the dynamic comparison of product to that of other competitors in the market. For HIGH RATIO :-) This shows that more sales are being made for given inventory investment, and it's favourable, however, in case of this ratio being extensively high, it might lead to shortage of alloted capital. For LOW RATIO :-) This means, unnecessary use of stock which is more compared to sales happening, this might lead to losses, as the non-selling product is in the inventory without making profits, and contributing to losses. This is used by majority selling companies, who have inventories, like retail outlets, examples are, More supermarket, Food world, big basket, Myra medicines, Walmart, etc. Thanks Team: positive negative Sahil nain & ujwal Kumar
Team Name- The Blues Inventory turnover measures how fast a company sells inventory and analysts compare it to industry averages. Low turnover implies weak sales and, excess inventory. A high ratio implies either strong sales or large discounts. The speed with which a company can sell inventory is a critical measure of business performance. It is also one component in the calculation of return on assets- the other component is profitability. The return a company makes on its assets is a function of how fast it sells inventory at a profit. High turnover means nothing unless the company is making a profit on each sale.
Stock Turnover Ratio & Stock Pressure is a metrics of supply chain analytics. These both ratio shows the how much stock is available for how long days & how much inventory should be stocked.
It help to manage the stock the different category of the product and also help to keep the availability of stock as per requirement.
Thank You.
Speed with which company can sell inventory is a critical measure of business performance.it is also component in a calculation of return on assets.
Stock turnover ratio shows the relationship between costs of goods sold and the average inventory. It helps to know how efficiently the investments in inventory is converted to sales. This technique helps to eliminate overstock issues. Low stock turnover indicates weak sales and overstock. Higher ratio implies high sales and high profits. Stock pressure helps to understand whether our product is under stocked or overstocked in the stores as compared to our competitors. By calculating stock pressure,we can determine safety stock levels in supply chain system to achieve high customer service level while operating with low inventory and high sales
STR shows how effectively the company's interest in inventories is changed over to deals and along these lines delineates the stock administration abilities of the association.
It is both a movement and effectiveness proportion. This proportion decides stock related issues, for example, overloading and overvaluation.
High Ratio - If the stock turnover proportion is high it indicates more deals are being made with every unit of interest in inventories. Despite the fact that high is ideal, a high proportion may demonstrate a deficiency of working capital and absence of adequate inventories.
Low Ratio - A low stock turnover proportion may demonstrate superfluous gathering of stock, wasteful utilization of speculation, over-interest in inventories, and so forth. This is a worry for the organization as stock could end up out of date and may result in future misfortunes.
STR tells the buyer about how long will his inventory last.
Stock turnover ratio and Stock pressure, indicates how efficiently the firm’s investment in inventories is converted to sales, and is very crucial for understanding the dynamic comparison of product to that of other competitors in the market.
For HIGH RATIO :-)
This shows that more sales are being made for given inventory investment, and it's favourable, however, in case of this ratio being extensively high, it might lead to shortage of alloted capital.
For LOW RATIO :-)
This means, unnecessary use of stock which is more compared to sales happening, this might lead to losses, as the non-selling product is in the inventory without making profits, and contributing to losses.
This is used by majority selling companies, who have inventories, like retail outlets, examples are, More supermarket, Food world, big basket, Myra medicines, Walmart, etc.
Thanks
Team: positive negative
Sahil nain & ujwal Kumar
Team Name- The Blues
Inventory turnover measures how fast a company sells inventory and analysts compare it to industry averages. Low turnover implies weak sales and, excess inventory. A high ratio implies either strong sales or large discounts.
The speed with which a company can sell inventory is a critical measure of business performance. It is also one component in the calculation of return on assets- the other component is profitability. The return a company makes on its assets is a function of how fast it sells inventory at a profit. High turnover means nothing unless the company is making a profit on each sale.