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Return On Investment

FORMULA FOR RETURN ON INVESTMENT

GROSS PROFIT – EXPENSES = NET PROFIT = NET PROFIT / INVESTMENT × 100%

Return on Investment - ROI

THINGS TO BE CONSIDERED IN

INVESTMENT

Paid-Up-Stocks
Closing Stocks
Claims
Credit in Market
Damages
Goods in Transit
Balance Amount with Companies

EXPENSES

Office Expenses
Salary to Staff Salesman-Delivery Man & Helper
Electric-Telephone-Internet Cost
Stationery
Maintenance & Vehicle Depreciation
Bank Charges
Cash Discounts
Godown Rent
Misc…. Exp

HOW TO INCREASE R.O.I

Reduce Expenses
Decrease Outstanding in market
Reduce Market Credit
Liquidation of slow moving stocks, near expiry Stocks, dead stock (run scheme by taking company approval)
Timely submission of claims in the company
Increase New Outlets
Increase Secondary (range selling)
Focus on high margin Sku’s
Group working to increase coverage
Try to control Infiltration & rate cutting
Try to prepare stock norms as per distributor’s area
Cover high volume outlets along with the distributors
Reduce Investment Cycle (It should not create secondary loss)
Try to rotate Stocks Primary against Secondary reducing stock level and increasing secondary (if dbr is having 15+ days stocks bring it to 7 days)
No extra commitment should be given to the Distributor
Checking bank limits, manpower costing, space allotted of the Distributors

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Return On Investment
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Return On Investment
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How to Calculate Return On Investment-Roi
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