![]() ![]() So far, we have dealt with shrinkage, we have learned how to accurately record sales data and inventory levels. Assuming a 2% tolerance, the company actually has much less inventory available than they thought! For our example, lets assume Florida Aerial Survey Technologies shows 20,000 cubic yards of inventory movement during July. Using this method, your inventory data will have a volume tolerance of roughly 2-5%. This gives our clients an actual, factual, insured report on what volume of material has been moved. Discovering Inventoryįlorida Aerial Survey Technologies provides stockpile calculations and asset turn over measurement products that allow our customers to observe the actual amount of inventory on hand and compare to the previous period. Overfilled trucks, heavy loads, weather erosion of stockpiles, and mishandling can reduce the amount of usable inventory. It can be very difficult to measure shrinkage, especially for aggregate, mining, and fill dirt suppliers. What about shrinkage? Shrinkage is the loss of inventory due to damage, theft, or obsolesce. ![]() Our company had 60,000 Cubic yards on hand and now believe they have a two months of inventory left on hand. Lets assume a company records $100,000 in sales in July on 15,000 cubic yards of sales. ![]() According to Chron, when a sale occurs accountants should debit the accounts receivables and credit inventory sales or revenue. Ideally, companies looking to track turnover ratios will have a sales account that records Inventory Sales. Now we will take a deeper look at how we get those figures from raw inputs. The formula in the short answer above dictates that ITR=Sales/Average Inventory. ![]()
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