How to find the turnover

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Turnover is an important economic indicator characterizing the final stage of the production cycle. It consists in the sale of goods, i.e. in their circulation in cash. Finding the volume of goods turnover is required not only for calculating profits, but also for detailing the analysis of the compliance of the results of the developed strategy.

Instruction manual

The goal of any trading company is to extract the maximum profit from the sale of goods. Market laws encourage manufacturers to take various measures to increase sales, including analyzing the current market situation, customer demand, developing new production plans, and studying the dynamics of various indicators.

The most important indicator of growth or decrease in profit is the volume of trade. Based on the name, this term means the exchange of a real product or service for money. Turnover is the total value of the entire batch of products sold. This is the monetary result of its transition from the production phase to the consumer phase to satisfy consumer needs.

It is these needs that are studied when forecasting a future strategy. The entrepreneur must take into account many factors in order to increase the volume of trade. This is primarily demand, which depends on the season of the year, place, fashion, average income level of the corresponding category of buyers, etc.

Distinguish between retail, wholesale and wholesale turnover in accordance with the type of enterprise. This value is calculated for a certain time period: day, month, quarter and year. The calculation formula is quite simple: T = Σpi • qi, where pi are the prices of goods, qi is their quantity.

The turnover structure is different for each individual enterprise. There can be several types of products, sometimes up to hundreds of items, therefore, for the correct calculation, you must first calculate the product of the characteristics of each of them, and then add up.

For example, a company produces stationery: paper clips, paper, pens, pencils, rulers, etc. Then, to find the volume of goods turnover, you need to add up for all types of products: T = (p_scr • q_scr + p_boom • q_boom +

)

An analysis of the dynamics of trade consists in comparing indicators for two periods: current and basic. In this case, you should determine the index of the volume of trade, which is general and physical. The first is found from the ratio between the data of the current and base period and characterizes the change in the value of goods: Iо = Σp1 • q1 / Σp0 • q0.

The index of physical volume of commodity circulation shows how its dynamics is affected by an increase or decrease in the quantity of goods. Only the prices of the base period appear in this formula: If = Σp0 • q1 / Σp0 • q0.