Comments for

Comment on Financial Modeling gets cheaper and cheaper by John Krech

John Krech — Tue, 08 Dec 2009 17:40:24 +0000

Great to see another company prove small business technology does not have to expensive to be powerful. Our award winning software makes it for small businesses to optimize inventory with Fortune 500 level features while starting out as low as $15/month. With the right technologies, small businesses can survive and thrive amidst the biggest competition.

Comment on Breakeven Analysis by Mu'azu Dauda

Mu'azu Dauda — Sun, 22 Nov 2009 14:48:53 +0000

Pls below is a problem that iam totally confused on how to compute it. kindly assist me in solving it:
Profit statements for the previous financial year of two companies, Alpha and Beta Limited,
are set out below:
Alpha Ltd Beta Ltd
$’000 $’000 $’000 $’000
Sales 2250 2250
Variable costs:
Direct materials 390 395
Direct labour 710 450
Variable overheads 475 280
1575 1125
Contribution 675 1125
Fixed overheads 450 900
Profit 225 225
Both companies are operating within the same industry and are selling to similar customers
and markets in a time of trade recession.

please, how can I
(a) Calculate the breakeven point and margin of safety for each company, expressing your
answers in terms of sales revenue. Comment on the significance of your figures.
(b) If the trade recession continues into the coming financial year, establish which company is
likely to earn the greater profit during this period.
(c) Both Alpha Lt and Beta Ltd have been invited to tender for a contract that will be in addition to their normal volume of business. Each company would normally ask a selling
price of $90,000. a competitor, however, is known to have quoted a price of $60,000 for the contract. Calculate the minimum acceptable price to be quoted for the contract by each company.

Thanks
Mu’azu Dauda

Comment on Breakeven Analysis by Mu'azu Dauda

Mu'azu Dauda — Sun, 22 Nov 2009 14:48:08 +0000

Comment on KPI Series – Inventory Turnover Ratio by K S Dinesh Kumara

K S Dinesh Kumara — Tue, 10 Nov 2009 13:33:36 +0000

Thank you so much,

As per could you pls. help us how to calculate the Inventory ageing.

Comment on KPI Series – Inventory Turnover Ratio by survivalware

survivalware — Mon, 09 Nov 2009 21:00:19 +0000

One is really the inverse of the other. Inventory Turnover is a measure of how quickly you move merchandise if you are a retailer, or cost of goods if you are a manufacturer. You take your cost of sales over a full year, and divide by the average inventory to get this number. The higher the number the better.

Days of inventory is a measure of how long it would take you to run out of stock if you didn’t reorder. It is calculated by taking the average inventory and dividing by daily cost of sales to express the number in days. In general, the smaller this number the better.

Comment on KPI Series – Inventory Turnover Ratio by K S Dinesh Kumara

K S Dinesh Kumara — Fri, 06 Nov 2009 18:27:43 +0000

We wanted to know difference between the Inventory turn over and days inventory on hand.

Comment on KPI Series – Inventory Turnover Ratio by Rusty Luhring

Rusty Luhring — Sun, 25 Oct 2009 14:04:43 +0000

The calculation should be the same whether for a retailer or a Hospital that carries inventory (supplies, I assume). If you have good inventory and COGS numbers by department, I would calculate it by department.

Here’s the calculation:

Inventory Turnover = Annual Cost of Goods Sold / Average Inventory

For Months:

Annual Cost of Goods Sold = Average Monthly Cost of Goods Sold (based on 3 month moving average) times 12

Average Inventory = the average of Last Month’s Inventory and This Month’s Inventory

For Quarters, Year to Date Periods, Year Totals:

Annual Cost of Goods Sold = Cost of Goods Sold for the time period divided by the number of months and times 12

Average Inventory = the average of Each Month’s Ending Inventory balance within the time period (e.g. for the first quarter it would be the average of Jan, Feb, and Mar ending inventory)

Comment on KPI Series – Inventory Turnover Ratio by pradip Bhattacharjee

pradip Bhattacharjee — Sun, 25 Oct 2009 12:46:47 +0000

1) how would I calculate inventory turnover ratio for a hospital stores?
2) shall I take the issues to various dept. as COGS ?

Comment on KPI Series – Inventory Turnover Ratio by Rusty Luhring

Rusty Luhring — Fri, 02 Oct 2009 20:01:47 +0000

Christy,
The standard financial model that comes with SurvivalWare would not be able to handle 1,000 SKUs, but a custom model probably could. We’ll be happy to give you a quote once we find out more about your specific needs (e.g. where is the data coming from, in what format, etc.)
– Rusty

Comment on KPI Series – Inventory Turnover Ratio by Christy Loftus

Christy Loftus — Fri, 02 Oct 2009 18:38:54 +0000

Rusty,

We have approximately 1000 sku’s and would like to know the turnover rate on each item and a 12 month rolling sales history by month or days of sale per item, will this software be able to help us?

Christy