Abc Analysis For The Year 2007 - 08: Inference

ABC ANALYSIS FOR THE YEAR 2007 08 Item Total Quantity per year 100000 300000 180000 900000
0 150000 300000 150000 150000 300000 15000 182000 135000 Cost per unit Total value Consumption value (%) 14.95 14.02 13.45 30.28 3.36 2.24 1.68 3.92 2.24 6.73 2.04 5.047 category
Bottles Labels Caps Tag Box Cartoon Case Barrels Tins Packets Containers Cork
4 1.25 2 9 0.6 0.2 0.3 0.7 0.2 12 0.3 15
400000 375000 360000 810000 90000 60000 45000 105000 60000 180000 54600 135000
B B B B C C C C C C C C
INFERENCE From the above table 4 items can be Rs. 1945000 and it will be graded as B category and 8 items can be Rs.729600 it will be graded as C category, and the remaining will be graded as A category
30
X 55 Y
ABC Analysis for the Year: 2008-09 Item Total Quantity per year 100000 288000 182000 150000 144000 288000 1152000 1152000 288000 14400 144000 750 Cost per unit Total value Consumption value (%) 10.03 9.63 9.57 34.08 1.72 1.38 8.23 19.27 1.38 3.78 0.689 0.251 category
4.2 1.4 2.2 9.5 0.5 0.2 0.3 0.7 0.2 11 0.2 14
420000 403200 400400 1425000 72000 288000 345600 806400 57600 158400 28800 10500
B B B A C C A A C C C C
INFERENCE From the above table 3 items can be Rs.2877000 and it will be graded as A category and 3 items can be Rs.1223600 and it will be graded as B category, and the remaining will be graded as C category.
15
30
55
X Y Z
4.35 1.75 2.45 10 0.75 0.5 0.4 0.2 0.2 0.75 0.4 15
626400 672000 548800 1600000 144000 192000 76800 138240 76800 144000 76800 14400
B B B A C B C C C C C C
INFERENCE From the above table 1 items can be more than Rs. 1600000and it will be graded as A category and 4 items can be Rs. 2039200 and it will be graded as B category, and the remaining will be graded as C category
15
30
55
X Y Z
4.7 2.5 2.7 12 0.85 0.6 0.5 0.25 0.3 9 0.5 17
761400 1080000 680400 2160000 183600 259200 108000 194400 129600 1944000 108000 18360
B B B A C C C C C A C C
INFERENCE From the above table 2 items can be more than Rs. 4104000 and it will be graded as A category and 3 items can be between Rs. 2521800 and it will be graded as B category, and the remaining will be graded as C category.
15
30
55
X Y Z
4.7 3.3 2.7 13 0.85 0.6 0.5 0.75 0.4 10 0.5 21
846000 15840000 756000 2600000 204000 288000 120000 648000 192000 240000 120000 25200
B A B A C C C B C C C C
INFERENCE From the above table 2 items can be Rs. 4184000 and it will be graded as A category and 3 items can be Rs. 2250000and it will be graded as B category, and the remaining will be graded as C category.
15
30
55
X Y Z
INVENTORY TURNOVER RATIO YEAR 2005-06 2006-07 2007-08 2008-09 2009-10 SALES 12960000 13500000 21060000 19440000 2100000 AVERAGE INVENTORY 7560000 8820000 11520000 13500000 13680000 RATIO (In%) 1.71 1.53 1.83 1.44 1.59
INTERPRETATION:
The table shows the inventory turnover ratio. The ratio was high in 2006-07(1.83), medium in 2008-09(1.59) and this ratio was low in 2007-08(1.44). it is observed that variation in the ratio is due to change in sales. Average stock show a steady growth during the period of 5 years. So the company is using inventory effectively.
INVENTORY TURNOVER RATIO
Chart Title
25000000 20000000 YEAR SALES 10000000 AVERAGE INVENTORY RATIO (In%) 5000000
15000000
0 1 2 3 4 5 6 7 8 9 10 11
FORMULA FOR ABC ANALYSIS: ABC Analysis . ABC analysis is a business term used to define an inventory categorization technique often used in materials management. ABC analysis provides a mechanism for identifying items which will have a significant impact on overall inventory cost whilst also providing a mechanism for identifying different categories of stock that will require different management and controls When carrying out an ABC analysis, inventory items are valued (item cost multiplied by quantity issued/consumed in period) with the results then ranked. The results are then grouped typically into three bands. These bands are called ABC codes.
Formula: Total Value = Total Quantity * Cost Per Order Consumption Value (0) Percentage = Value of single Item *100/Total Value of Item
FORMULA FOR INVENTORY TURNOVER RATIO ANALYSIS: INVENTORY TURNOVER RATIO: This ratio shows how many times in one accounting period the company turnover in its inventory. It is valuable for spotting under-stockings, overstocking and obsolescence. Faster turnover of inventory shows positive trend and negative trend is when inventory is obsolete. Inventory turnover ratio shows increase in cash flow by keeping a track of sales over the year. Inventory turnover reduces warehousing and other related costs.
FORMULA: Inventory turnover ratio = cost of goods sold (or) sales/Average inventory Average inventory = opening stock + closing stock/2

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ABC ANALYSIS FOR THE YEAR 2007 08 Item Total Quantity per year 100000 300000 180000 900000

4 1.25 2 9 0.6 0.2 0.3 0.7 0.2 12 0.3 15

4.7 2.5 2.7 12 0.85 0.6 0.5 0.25 0.3 9 0.5 17

4.7 3.3 2.7 13 0.85 0.6 0.5 0.75 0.4 10 0.5 21

INVENTORY TURNOVER RATIO

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