1 How much inventory does your company have in its warehouse? If you purchase 1,000 parts at a unit price of 100 yuan, the material inventory is 100,000 yuan. In addition, there will be finished goods and work-in-progress inventory. In accounting, these are classified as materials, work-in-progress, and finished goods. All inventory within the company is referred to as "inventory" in accounting. The total of these amounts is recorded as the "inventory" amount on the financial statements. However, it is difficult to calculate an accurate figure without taking a physical inventory at the time of settlement. We all know that merely producing products does not count as revenue; only when products are sold can they be recorded as sales. After receiving payment for the sale, the inventory can be converted into cash. Inventory is generally managed by quantity, such as "how many items at a certain unit price" or "how many grams of material at a certain unit price." At this time, how long these inventories have been stored in the warehouse or on site is ignored. Traditional accounting methods completely disregard the idea of "how many days the inventory has been sitting." Therefore, it is impossible to know what risks long-term inventory holding brings to the company. In other words, few people pay attention to "what losses are incurred after 10,000 yuan of inventory sits for one day." Faced with the question "What losses are incurred after 10,000 yuan of inventory sits for one day?" almost all accounting managers only consider the interest payment on the funds used for inventory, citing bank loan interest rates, and answer, "10,000 yuan of inventory in the warehouse for one day loses at most 1 yuan." This sounds convincing, but let's see if there are other methods. Here, we transform "How much does 10,000 yuan of inventory lose in one day?" into "How much should 10,000 yuan of inventory earn in one day?" and make a mental shift. First, calculate "how much gross profit can 10,000 yuan of inventory generate in one year." Then divide by 365 days to know how much gross profit it can generate in one day. Here, we define this as the "inventory gross margin ratio": Inventory gross margin ratio = Gross profit amount ÷ Inventory amount. Suppose inventory is 1 million yuan and gross profit is 5 million yuan. Then calculate the inventory gross margin ratio: Gross profit 5 million ÷ Inventory 1 million = 5. Through calculation, we know that inventory earns gross profit equivalent to 5 times its own value in one year. _ So, how much can 10,000 yuan of inventory earn in one day?_ 10,000 X 5 (inventory gross margin ratio) = 50,000 (one year) 50,000 ÷ 365 days = 137 yuan (one day) This means that 10,000 yuan of inventory can earn 137 yuan per day! In other words, "If you leave 10,000 yuan of inventory in the warehouse for one day, you lose 137 yuan in profit!" 2 Now let's look at a real case from Toyota. Toyota's actual performance for March 2008 showed an inventory gross margin ratio of 806.27%. That is, for 10,000 yen of inventory, if it works for a year, it would earn 80,627 yen, or 221 yen per day. Storing it for one more day means losing 221 yen. On a Toyota distribution center transport truck, there are 4 cars with an average value of 2 million yen. Since 10,000 yen stored for one more day loses 221 yen, for 2 million yen, the loss would be: 221 yen X 200 X 4 cars = 176,800 yen (approximately 10,000 RMB) That is, letting 4 cars sit for one more day is equivalent to losing 10,000 RMB! -END- ****Click the image to read directly FMCG industry's most professional and practical knowledge base 【 Reply with the yellow number in the background to view the following keywords 】 | **001 **Excellent article selection | 002 Distributor market operations | **0****03 **Terminal visit management | **004 **Sales supervisor skills | ** 005 **Sales improvement techniques | **006 **Channel expansion | 007 Managing distributors | **008 **Distributor development | 009 Distributor internal operations management | **010 **Team management | **011 **Efficient distribution techniques | **012 **Sales manager's eighteen skills | **013 **KA operation methods and strategies | 014 Sales novice's first lesson | **015 **Internet, brand | **016 **Distributor B2B transformation |