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Mastering Inventory Management: Propel Your Investment Strategies to Success

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Unlock the secrets of inventory management with Alan M. Friedman, CPA, to maximize profits through strategic buying and efficient turnover. Learn how to make data-driven decisions, set inventory targets, and achieve optimal GMROI.

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Mastering Inventory Management: Propel Your Investment Strategies to Success

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Presentation Transcript

  1. “Inventory: How to Manage Your Biggest Investment” Course Title presented by Alan M. Friedman, CPA Friedman, Kannenberg & Company, P.C.

  2. Objectives • Demonstrate how to make a “sound investment” in inventory • Remove the “gut approach” and instead use an objective reporting tool to manage your inventory • Q&A along the way

  3. 4 Buying Factors • Can I sell this product ? • Will I make a profit ? • How quick can I sell it ? • How fast will I have to pay my vendor for it ?

  4. Solution Alan’s Rule of Thumbfor buying inventory

  5. Alan’s Rule of Thumb? “ Buy the product ONLY If you know you can sell it in “X” days or less, where “X” is equal to 360 daystimes your gross profit percent. ”

  6. Alan’s Rule of Thumb?

  7. Managing Inventory • Gross Profit • Inventory Turns • Gross Margin Return on Investment (GMROI)

  8. Gross Profit Sales $ 1,000,000 100% Cost goods sold ( 600,000) 60% --------------- ------- Gross Profit $ 400,000 40% ========= ====

  9. Inventory Turns Cost of goods sold ($ 600,000) ------------------------ Avg Inventory cost on hand ($ 300,000) = Inventory turned “2 Times” …or, it took you 6 months to turn over your entire inventory (in $$$)

  10. GMROI Gross Profit ($ 400,000) -------------------- Avg Inventory cost on hand ($ 300,000) = GMROI of $1.33 …or, your earned $1.33 for every $1.00 you invested in inventory

  11. GMROI Goal Most retailing experts (across industries) suggest a GMROI target of $1.50 or better

  12. The Secret Weapon:a “1-Page Solution”to Managing Your Inventory

  13. GMROI Goal

  14. Need more help? ContactJen Lowe after this seminar to set up a meeting time

  15. Thanks RPMDA! Any questions? Any Questions?

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