HGE 1116: Entrepreneurship PDF

HGE_1116 : ENTREPRENEURSHIP Marketing Strategies, Business Plan, Bookkeeping Marketing Strategies Environmental factors: ○ Cultural Factor (Culture, Subculture, Marketing Environment:...

HGE_1116 : ENTREPRENEURSHIP Marketing Strategies, Business Plan, Bookkeeping Marketing Strategies Environmental factors: ○ Cultural Factor (Culture, Subculture, Marketing Environment: and Social Class) ➨ Micro Environment ○ Social Factor (Groups, Family, and ➥ Company Roles & Status) ➥ Suppliers ○ Personal Factor (Age & Lifestyle ➥ Customers Stage, Occupation, Economic ➥ Intermediaries circumstances, Lifestyle, and ➥ Competitors Personality & Self-Concept) ➥ Publics ○ Psychological Factor (Motivation, ➨ Macro Environment Perception, Learning, and Beliefs & ➥ Demographic Attitudes) ➥ Economic ➥ Natural Consumer Decision Making Process ➥ Technological how consumers behave before a purchase: ➥ Political Need Recognition - understanding a ➥ Cultural problem and needing a solution. Information Search - learning more Macro and Micro Environmental about the products/services that fits the Analysis to position the business in the need. industry. Alternative Evaluation - checking out other solutions and the competitions. Macro Segment Identification to position Purchase Decision - the consumer the product on the targeted segment. makes the purchase. Post-Purchase Behavior - customers Consumer Buying Behavior the reaction turning into advocates for a brand. of the consumers to various events or forces that are happening in the business Entrepreneurial Research on Consumer community which contribute to the decision Buying Behavior process. ○ Behavior refers to the reaction of the Research defined as a scientific consumers to changes happening in investigation. Involves collection, the environment that influence their presentation, analysis and interpretation of buying decision. gathered data. Conducted to find out the buying behavior of consumers by following Consumer Buying Behavior a procedural process. 1. What are the tastes and preferences of the consumers? Types of Entrepreneurial Research: 2. What makes the consumers buy or not Exploratory Research - preliminary buy the product? research work designed to gather 3. What factors influence consumer baseline information to be used in buying behavior? solving a problem or formulating a 4. How does the consumer decide in hypothesis. buying the product? HGE_1116 : ENTREPRENEURSHIP Marketing Strategies, Business Plan, Bookkeeping Hypothesis - is a tentative statement Research Instrument: or answer to a problem. Survey Questionnaire Descriptive Research - conducted to Interview Schedule (structured and describe the present condition, non-structured- focus group discussion problem or phenomenon. guide) Causal Research - intended to Observation Checklist establish the relationship or the cause and effect situation among the Types of Buying Behavior: variables covered in the study. Complex Buying Behavior - consumers buy expensive products and Research Data refers to the kind of perform all the procedural steps in necessary information to be gathered in making the decision. answering the objective of the research Simple Buying Behavior - customers work. This can be classified either as buy goods that are low priced and are quantitative or qualitative data and primary not particular with the brand. or secondary data. Brand Sensitive Buying Behavior - where customers buy products because Quantitative Data can be counted and of their brand and seek to be attached to mathematically computed. They are the brand. expressed in numerical values. Price Sensitive Buying Behavior - where customers buy expensive goods Qualitative Data are generally descriptive regardless of their brands and equate data and hence cannot be counted. high price with good quality. Mathematical computations cannot be performed on quantitative data since they Marketing Mix is a combination of 7 are not numerical values. factors, or kinds of choices, that a company deals with in order to properly and efficiently Primary Data these are data sourced by market their products and services. The 7 entrepreneurs directly from consumers Ps of marketing are product, place, price, belonging in the market segment. (Survey, promotion, people, packaging, and Experimentation, and Observation) positioning. It is a program or strategy that will deliver the value of the product to the Secondary Data are data previously target consumers. gathered by another researcher for other purposes and now exist on other sources. Product these are goods that are offered (Data gathered by marketing associations to target customers. It can be tangible and included in their publications. Data goods or intangible services. It is created collected from the survey conducted by the because of the customers needs and wants. Philippine Statistics Authority (PSA) and published on its website. Data gathered by Types of Product: the Bangko Sentral ng Pilipinas (BSP) and Consumer Goods/Product included in the BSP annual report.) (Convenience goods, Shopping goods, Speciality goods, and Unsought goods.) HGE_1116 : ENTREPRENEURSHIP Marketing Strategies, Business Plan, Bookkeeping Industrial Goods/Product (Raw Odd / Even Pricing - where the Materials, Fabricating parts and products are sold at prices that end in materials, Installation, Accessory odd numbers like 5. equipment, and Operating supplies.) Prestige Pricing - the products are Substitute Products purposely sold at higher price to create a superior image. Stages of Product in the Market: I. Introductory Stage Promotion it is conveying the presence (Price skimming approach- the new and attributes of a product to the target product is highly priced.) consumers. (Price penetration approach- the product is introduced with a low Promotional Strategies: price.) - Advertising II. Growth Stage - Publicity (Cost based model- the price is - Personal Selling simply equal to the cost plus the - Sales Promotion (Discounts, desired profit margin.) Coupons, Cash Rewards, and Gift III. Maturity Stage Certificates) (Cost based models can be applied - Direct Marketing too in this stage.) IV. Decline Stage - the product People these are the employees or decreases in sales. workers who work with you. It refers to the individuals or workers who are directly Place this is where your target customers involved in the production of goods or are. An entrepreneur must establish and services. choose the strategic place for the venture. (Strategic place- means it is accessible to Packaging it is putting the product in an both consumers and suppliers.) attractive package. It refers to the process of putting the product in a package or Price this is set based on availability of container. competing products, cost of making the product, type of product and stages of Positioning the place occupied by the product. It tells the pricing strategy that the product in the mind of consumers. It refers entrepreneurs use. It refers to the amount to the mixture of different attributes of the the buyer will spend to avail the product or product from the perspective of the service. consumer. (Cost of Making the Product: Direct Integrated Marketing Mix different Materials- Direct Labor- Factory Overhead.) categories of the marketing mix are not applied separately, rather than Psychological Pricing: harmoniously in order to influence the Promotional Pricing - examples are demands of target consumers. midnight sales and Christmas sales. ➔ Customer satisfaction for the product. ➔ Customer convenience for the place. HGE_1116 : ENTREPRENEURSHIP Marketing Strategies, Business Plan, Bookkeeping ➔ Customer cost lowered. Brand name usually is a name applied by ➔ Customer information for promotion. a manufacturer or organization to a ➔ Customer quality assurance for people. particular product or service. ➔ Customer safety for packaging. ➔ Customer decision for positioning. Branding Approaches: Umbrella Brand Approach - all Needs is something we must have like products of the business carry the same food, water, and shelter. name. (Honda Motors) House Brand Approach - every Wants is something that people desire to product of the same business has a obtain in order to become happy and separate brand name. (Procter & satisfied. The Wants are there to make our Gamble Phils, Inc.- Pantene, Rejoice, lives more enjoyable. Ariel, Joy, Tide, and Downy) Line Extension Approach - the existing The Theory of Maslow’s Hierarchy of product has been modified or altered. Needs (New flavor, new variant, additional size, Abraham Maslow will help determine the and usage) particular needs and wants of the Product Extension Approach - a new customers. product carries a brand name in a new Self Actualization - desire to become category. (GE Company usually offers the most that one can be. refrigerators, air conditioning, Esteem - respect, self-esteem, status, housewares and applications. They will recognition, strength, and freedom. add a new category which is the Love and belonging - friendship, cameras but the name is still GE.) intimacy, family, and sense of connection. Environmental Analysis: Safety needs - personal security, Trend in the Industry - industry or market employment, resources, health, and trends are changes or developments that property. are happening within a particular field. They Physiological needs - air, water, food, can take many forms, from new shelter, sleep, clothing, and technologies to shifts in consumer behavior. reproduction. And they have the potential to create both opportunities and challenges for Branding is a marketing practice in which businesses. Include new competitors, a company creates a name, symbol or advancing technologies, or different design that is easily identifiable as preferences among new generations. New belonging to the company. Branding helps technologies and new competitors are often distinguish your product or services from the most common industry trends. others. It is an entrepreneurial strategy which can help you by positioning the Factors that Shape Market Trends: product in the minds of the customers. ○ Government ○ International Transactions ○ Speculation and Expectation ○ Supply and Demand HGE_1116 : ENTREPRENEURSHIP Marketing Strategies, Business Plan, Bookkeeping Consumer Analysis its goal is to Part of the Business Plan: understand how customers behave and I. Introduction what their preferences are. It involves II. Executive Summary gathering and studying demographics, III. Environmental Analysis buying patterns, product usage history, IV. Business Description spending habits, loyalty metrics, and V. Organizational Plan more. This aims to understand wants, VI. Production Plan needs, pain points, and objectives. VII. Operation Plan Competitors Analysis VIII. Marketing Plan Market Forecast IX. Financial Plan Market Share X. Appendix Market Positioning refers to the process of establishing the image or Introduction - presents the general identity of a brand or product so that perspective of the business and it is written consumers perceive it in a certain way. in 1 to 2 pages: Marketing Strategy a business’s Proposed name overall game plan for reaching Address prospective consumers and turning Owner/s them into customers of their products. Description Location Business Plan roadmap of new business. Funding requirement and Source Single written document for new or expanding business. Provides clear Statement of Confidentiality - this is direction to any uncertainties. A detailed added in the last section of the introduction and integrated written document that in case the consulting team prepares the describes the various activities involved in business plan for prospective owners or opening and operating a new investors. entrepreneurial venture. Organizing a Business Sole Proprietorship Feasibility Study is of equal importance Partnership as the business plan. It serves as the Corporations forerunner of the business plan. It must be Description: prepared before opening the business or Vision expanding an existing business. Mission Objectives Test of Possibility - explores whether the Type of product/business idea or concept can actually be realized. It Product/service is more about the creative aspect and the Funding and Requirement Source: innovation behind the product or service. Initial cost Test of Feasibility - takes a more practical Project creakdown cost approach, focusing on whether the business Source of fund idea can be implemented successfully. (Initial Investment and settling time by creditors) HGE_1116 : ENTREPRENEURSHIP Marketing Strategies, Business Plan, Bookkeeping Executive Summary - last section to be Societal Analysis - political, economic, written. Next major part after the social, socioeconomic, technological, introduction. Points overall highlights as well ecological, legal. as bird’s eye view. 3-5 not too short or too Industry Analysis - position of long. business in the industry, most Vision, mission, goals & objectives appropriate strategy to be adopted. (VMGO) Business model Evaluating the business position - Business and product position Perceptual Map or Positioning Map. Wealth improvement approaches Parties supporting the business Business Description - presents the nature and form of the business. Includes Business Model - defines the perspective innovative features of the business. of the business in terms of its structure, production, operation, and financial Addition: activities that will lead to the achievement of Product or service VMGO. Various plant and office equipment Size of the proposed business Wealth improvement approaches - Future parties describes methodologies or approaches in Personnel requirement order to: Administrative operation Maintain the competitive advantage Position the business in the market Organizational Plan Improve the market share Form of business organization Maximize the utilization of Liability of the owner/s resources. Organizational structure Roles and responsibilities Parties supporting the business (direct Salary requirements relationship with the business): Factors affecting the selecting of Consumers most appropriate business form: Creditors Capital requirement Suppliers Liability of the owner/s Employees and Staff Management and supervisory skills Tax implications Environmental Analysis - is a strategy that Government intervention helps determine the external and internal Nature of business factors affecting the performance of the External financing requirement business. Global Analysis - not all about the Liability of owner trends, what will happen in the future. Limited - the personal financial The readers must be convinced based responsibility of the business owners on its global trend. (typically shareholders in a corporation) is limited to the extent of their investment in the business. HGE_1116 : ENTREPRENEURSHIP Marketing Strategies, Business Plan, Bookkeeping Unlimited - business owners are ○ Basis of receiving the raw personally responsible for all the debts materials and obligations of the business. ○ Comparison of the order and receipt Salary package ○ Quality of materials received Monthly Storage and inventory control Annual system Mandated benefits ○ Owning or renting a (SSS, Pagibig, Philhealth) warehouse ○ Management of the Production Plan presents or describes warehouse activities related to the production of goods. ○ Procedures in the transfer of goods Service Provision Plan: ○ Control of inventory in the Production Schedule: warehouse ○ Demand for product ○ Availability of resources Just-in-time manufacturing systems are ○ Capacity of the plant eliminated because only actual orders are Production Process: produced at the exact required time. ○ Exact processing procedure ○ Materials, parts or ingredients Shipment system and control required ➔ Approval of shipping and sales ○ Expected time to process the document product ➔ Terms of shipment Processing Plant and Equipment: ➔ Manner of shipping the product ○ Capacity of the plant or machinery ➔ Other terms and conditions like ○ Model of the machinery or sales contracts. equipment Functions of support services ○ Availability of spare parts ○ Cost and terms of payment Marketing Plan: Sources of Materials: Product ○ Proximity of the source to the Place processing plant Price ○ Payment terms and conditions Promotion ○ Discounts and damages People Production Cost Packaging Positioning Operation Plan major section that outlines the various activities, from the acquisition of Financial Plan: raw materials to the delivery of the products Major assumptions to the target consumers. Projected statement of Evaluation of suppliers comprehensive income Materials requisition and receiving Projected statement of cash flows procedures HGE_1116 : ENTREPRENEURSHIP Marketing Strategies, Business Plan, Bookkeeping Projected statement of changes in Types of inventory for manufacturing equity business: Projected statement of financial ➔ Raw materials position ➔ Work-in-Process Financial statement analysis ➔ Finished goods ➔ Equipment - tools or equipment can Appendix be directly used in production of goods. Journal is the book of original entry. ➔ Furniture and Fixtures - assets like Journalizing is the process of recording in chair, tables, and displays. the general journal. Two books of accounts: Liabilities Journal ➔ Accounts Payable - financial Ledger obligation Simple Journal Entry one debit and one ➔ Notes Payable - financial obligation credit. supported with promissory notes. ➔ Utilities Payable - it describes the Compound Entry more than one debit or unpaid obligations on light and water credit. consumption. Date Column ➔ Salaries Payable - it describes the Particulars unpaid salary of the workers. Posting reference Debit column Capital Credit column ➔ describes the original and additional investment of the owner. Account Titles provides the description of ➔ Drawing - it describes the temporary the type and nature of the business withdrawal of capital by the owner. transaction: Assets Income ➔ Cash - it is paper bills or coins. ➔ Service Income - general services ➔ Accounts Receivable - collectibles rendered. from the customer who made sales ➔ Rental Income - income arising transactions on credit. from rent or lease. ➔ Notes receivable - collectibles that ➔ Sales Income - it describes the sale are supported with promissory of goods or products to the notes. consumer. ➔ Supplies on hand - unused office or store supplies. Expenses ➔ Unused factory supplies - ➔ Salaries and Wages - it describes unutilized manufacturing supplies. the expenses on payments or ➔ Inventory - it describes unsold salaries. goods. ➔ Store Supplies expense - it describes story expenses on supplies. HGE_1116 : ENTREPRENEURSHIP Marketing Strategies, Business Plan, Bookkeeping ➔ Taxes and License - it describes nature or characteristics of the account. It the expenses on taxes, fess, permits refers to the grouping of similar business and licenses. transactions and events. It is the second ➔ Utilities expenses - it describes the mechanical phase of the whole accounting expenses on lights and water. process. ➔ Traveling expense - it describes the expenses on transportation or fare of Ledger it is the book of the final entry. personnel. Book of accounts used to record the business transactions and events. It Business Documents it is a supporting basically acts as an accounting tool that documents of the existence of transactions: accumulates all necessary information prior ❖ Purchase Order - Issues by buyer to to the preparation of the financial the seller of goods. statements. ❖ Invoice - a commercial document issued by the seller to the buyer. Posting the process of transferring the ❖ Official Receipt - it indicates the full information from journal to ledger. payment. ❖ Deliver Receipt - serves as an The following procedures should be evidence that the goods or services are observed in posting in the ledger: received. 1. Arrange the ledger in accordance with ❖ Receiving Report - it is used within the the listings appearing on the chart of business upon receipt of the goods accounts. Otherwise, arrange the shipped. ledger in the following order: assets, ❖ Check - document that orders a liabilities, capital, income, and payment of money from the current expenses. account maintained by the bank. 2. Label the different sections of the ❖ Voucher - internal document that ledger properly. The account title must authorizes the incurrence or payment be centered at the top of the page. of obligation. Indicate the page number at the rightmost side in line with the account Simple Bookkeeping title. Write the year and the month once on both the debit and credit side. Fundamental concepts in bookkeeping: 3. Start the posting process with the first Support all transactions with business debit entry found in the journal. In documents. posting the debit entry, observe the Record the transactions using a two following procedures: column journal. a. Transfer the date first, followed by Use the proper account titles. the amount. Observe the guidelines when using b. Indicate in the folio column of the the two column journal. ledger the page number of the journal. Classifying on a daily basis bookkeeping c. Indicate in the folio column of the is done. At the end of the month, all general journal the page number transactions will be grouped based on the of the ledger. HGE_1116 : ENTREPRENEURSHIP Marketing Strategies, Business Plan, Bookkeeping d. Make a brief explanation in the (Income Statement): particulars column of the ledger. Net Income = Revenue - Expenses This is optional. (Owner’s Equity): 4. Repeat all the procedures in step 3 Owner’s Equity = Assets - Liability for the credit entry. 5. Repeat steps 3 and 4 in the next Guide to Journal Entries: entry in the journal until all entries When to Debit: are completely posted. ➔ Increase in asset (That posting is usually made at the end of ➔ Increase in expense the month after recording the last ➔ Decrease in liability transaction.) ➔ Decrease in equity account (income) When to Credit: Trial Balance is the listing of the debit and ➔ Decrease in asset credit balances of accounts from general ➔ Decrease in expense ledger. ➔ Increase in liability Purpose of Trial Balance: ➔ Increase in equity account (income) To prove the quality of debit and credit. The following procedure must be observed To determine the nominal accounts when using the Two-Column General to be closed. Journal: To serve as the basis for making I. Labeling the journal drafts of financial statements. II. Writing the date in date column 2 major parts of Trial Balance: “as of” III. Writing the debit and credit account Heading - it has 3 lines (business titles name, title, and date) IV. Writing the amount Body - it represents the different V. Writing short explanation/description in account titles and their balances. the particular column 2 kinds of Trial Balance: Trial balance of totals Footing is the process of adding the debit Trial balance of balance and the credit money columns of the ledger and finding their balances. Bookkeeping refers to the recording of business transactions in the books of the The following procedures should be business. observed in footing the Ledger: I. If an account has a debit balance. That Transaction refers to the events where is, the debit total is higher than the exchanges of values that are measurable in credit total, the difference is placed in one common denominator. the particular column of the debit side. II. If the account has a credit balance, that Accounting Equation is, the credit total is bigger than the (Balance Sheet): debit total, the difference is placed in Asset = Liability + Capital the particulars column of the credit Liability = Asset - Capital side. Capital = Asset - Liability  HGE_1116 : ENTREPRENEURSHIP Marketing Strategies, Business Plan, Bookkeeping III. If there is only one entry on any side of the owner/s on the properties of the an account in the ledger, no footing is business. done and the entry is simply left open. ➔ Sole Proprietorship - “Owner’s Capital” Major Sections of the Balance Sheet: ➔ Partnership - “Partners’ Capital” Asset Section - refers to the ➔ Corporation - “Shareholders’ properties owned or controlled by Equity” the business. ➔ Current Assets - assets that can be Income Statement one of the three consumed, realized, or utilized within important financial statements used for one year or within the normal reporting a company’s financial operating cycle of the business. performance over a specific accounting (cash, either in hand or in the bank, period, with the other two key statements accounts receivable, notes being the balance sheet and the statement receivable, inventories (finished of cash flows. goods, work in progress, and raw materials), supplies on hand (office Parts of Income Statement: or factory supplies), and prepaid Heading items (prepaid insurance, prepaid ➔ Name of Business advertising) ➔ Name of Financial Statement ➔ Non-Current Assets - assets that ➔ Date usefulness -and benefits extend Body usually beyond one year or beyond ➔ Revenue the normal operating cycle of the ➔ Expenses business. (land, building, machinery, ➔ Net Income equipment, furniture and fixtures) ➔ Net Loss Liability Section - refers to the financial obligations of the business Major Sections in Income Statement: as of the date indicated in the Income or Revenue Section balance sheet. ➔ Sales ➔ Current Liability - that are payable or ➔ Sales Returns and allowances will mature within one year from the ➔ Sales Discounts date of the financial statement. Cost of Goods Sold Section (accounts payable, notes payable, ➔ Merchandising - inventory, salaries payable, sss, medicare, and purchases, and related account pag ibig contributions payable, ➔ Service advance from customers, and ➔ Manufacturing accrued expenses) Operating Expenses Section ➔ Non-Current Liability - financial ➔ Salaries and Wages obligations of the business whose ➔ Utilities Expenses maturity period is beyond one year ➔ Supplies Expenses from the date of the balance sheet. ➔ Taxes and Licenses Owner’s Equity Section - it ➔ Traveling Expenses represents the residual interest of ➔ Doubtful Accounts HGE_1116 : ENTREPRENEURSHIP Marketing Strategies, Business Plan, Bookkeeping business using financial mix ratios in order Inventory Account refers to goods that to determine the following: remain unsold or unconsumed at the end of Profitability the accounting period. Liquidity 3 Types of Inventory: Solvency Raw Materials - raw materials that are not used or consumed on December Profitability Ratios group of financial 31. statement ratios that primarily determine the Work in process Inventory - raw profitability of the business operations. materials that have been started but remain unfinished on December 31. Gross Profit Rate represents the Finished Goods Inventory - goods difference between net sales and cost of that have been completed but sales of the entrepreneurial venture during a remained unsold on. given period. The 1st level of revenue presented in the income statement is gross Ratio Analysis is a quantitative procedure profit. of obtaining a look into a firm's functional ➔ Gross Profit = Gross Profit / Net Sales efficiency, liquidity, revenues, and profitability by analysing its financial records Cost refers to the purchase price of the and statements. product including the total outlay required in producing. Financial Statements refers to the income statement and the balance sheet. Operating Profit Margin Rate is the excess of gross profit from operating Income Statement reflect the results of expenses (also called Period Costs) the financial operation for a given period. ➔ Operating Profit Margin Rate = Operating Profit Margin / Net Sales Balance Sheet shows the financial position of a given date. Net Profit Margin Rate measures the overall operating performance of the Common users of financial statements: business. The net profit is the 3rd level or Short term investors revenue presented in the income statement. Long term investors ➔ Net Profit Margin Rate = Net Profit / Net Lenders or financial institutions Sales Suppliers or creditors Employees Return on Investment measures the Government amount of net income per peso invested in Management the business. The average total asset is Owners computed by dividing the sum of the total assets at the beginning and end of the Areas of Business period. Financial Statement Analysis process of ➔ Return on Investment = Net Income / evaluating financial statement of the Average Total Assets HGE_1116 : ENTREPRENEURSHIP Marketing Strategies, Business Plan, Bookkeeping Liquidity Ratios refers to a group of Average Sales Period measures the financial statement ratios that are intended ability of the business to convert its to measure the ability of the business to pay inventory into receivable. It indicates how its currently maturing obligations. fast the business is able to sell its inventory. ➔ Average Sales Period = 360 Days / Current Ratio are assets that can be Inventory Turnover used, consumed, or converted into cash within 1 year or with the normal operating Solvency Ratios a group of financial cycle of the business, whichever is longer. ratios that are used to measure the ability of ➔ Current Ratio = Current Asset / Current the business to settle all business Liabilities obligations that will mature and still remain stable. Acid Test Ratio similar to current ratio, however, it is considered stricter in its Debt Ratio basically measure the application because it does not include percentage or proportion of funds that is inventories and prepaid items since provided by the creditor. inventories take longer periods. ➔ Debt Ratio = Total Liabilities / Total ➔ Acid Test Ratio = Quick Asset / Current Assets Liabilities Equity Ratio determines the level of Receivable Turnover are receivables of investment provided by the owner. the business that arise from ordinary ➔ Equity Ratio = Total Owner’s Equity / business transactions, this indicates that if Total Assets the receivables include non trade receivable, which is receivable that does not Debt to Equity Ratio measures the arise from the ordinary course of the percentage or proportion of debt and equity business, shall be excluded. in the capital structure of the business. ➔ Receivable Turnover = Average Net ➔ Debt to Equity Ratio = Total Liabilities / Credit Sales or Net Sales / Average Total Equity Trade Receivable Times Interest Earned tie, measures the Average Collection Period the average ability of the business income to cover the period measures how fast the business is interest that arises from borrowings. able to collect its trade receivables. ➔ TIE = Income before Interest and ➔ Average Collection Period = 360 Days/ Taxes / Interest Expense Receivable Turnover Inventory Turnover measure the number of times when the inventories are acquired or bought and then finally sold to customers during the year. ➔ Inventory Turnover = Cost of Goods Sold / Average Inventory