It's so cool, thank you! May I ask why COGS/Average Inventory = IT, so if IT is expected to be high, then COGS is also expected to be high right? But is it good for the COGS to be high, bc it means production cost is high, or maybe is it related to high sales?
You're right. COGS here shows sales level. IT could be high if COGS (sales) are high or Average Inventory is low. It's an efficiency metric that shows if the cash invested in inventory is being cycled optimally. If it's too low, it means a lot of cash is trapped in idle inventory, which is not an efficient use of cash. If IT is too high, however, it might signify very low inventory levels at the business, which could lead to lost sales. It's a good practice to compare IT level to benchmarks, because it differs from retail segment to another. Sorry, not sure what cumulated issues are.
The closing inventory for the last period (e.g last year) is the beginning inventory for this period. So you will take the closing inventory from the old period and the closing inventory from this period and get the average.
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You sound young with good business knowledge. As long as you stay dedicated and don't get distracted, you'll get far in life
This comment is very encouraging. Thank you so much, Connor!
Thanks for posting this smart explanation. It's very helpful and clear.
You're welcome ! :)
how do you calculate company has sold 2 times and company b 3 times
Cool stuff. Big thanks 👍
Thank you for watching!
Thanks
You're welcome! Thank you for watching :)
Thank you so much!
You're welcome, Hanady! Thank you for watching.
It's so cool, thank you! May I ask why COGS/Average Inventory = IT, so if IT is expected to be high, then COGS is also expected to be high right? But is it good for the COGS to be high, bc it means production cost is high, or maybe is it related to high sales?
And may I ask if there is any relation between IT and cumulated issues?
You're right. COGS here shows sales level.
IT could be high if COGS (sales) are high or Average Inventory is low. It's an efficiency metric that shows if the cash invested in inventory is being cycled optimally. If it's too low, it means a lot of cash is trapped in idle inventory, which is not an efficient use of cash.
If IT is too high, however, it might signify very low inventory levels at the business, which could lead to lost sales. It's a good practice to compare IT level to benchmarks, because it differs from retail segment to another.
Sorry, not sure what cumulated issues are.
@@RetailDogma Wow, thank you so much for the detailed and helpful answer. I've already subscribed to your channel for more great videos!
Our pleasure!
How do you calculate the turnover when you have only the closing inventory in your data?
The closing inventory for the last period (e.g last year) is the beginning inventory for this period. So you will take the closing inventory from the old period and the closing inventory from this period and get the average.
@@RetailDogma thank you so much!
@@RetailDogma how do you calculate the turnover when there is no closing inventory for the last year, and only given the closing for current year
the closing for this year alone is not enough, you need at least 2 data points to get the average.
Post some more video regarding electronic appliances store video and about their reports
Damnn post more video