Sales are the key line in any projection. Your process to date is aimed at enabling you to comment professionally on the ability of the company to meet sales and other projections.
- Ensure that the trading projection is sufficiently detailed to identify sales and production by product range.
- Consider what percentage of sales forecasted turnover is represented by new products, new customers, and new markets.
Review sales projections
- Consider any account-specific sales, marketing strategies that the company may be deploying.
- Are these projections achievable in the circumstances? Does the company have a detailed strategy and adequate resources to achieve the sales, marketing plan?
- Consider all relevant external factors that could impact future sales; for example: macroeconomic factors, government legislation, and adverse product publicity.
- Confirm comparability with prior periods.
- Analyze cost of sales for each product line or division.
- Is the production plan feasible in terms of volume/resources needed?
Review cost of sales projections, considering:
- Foreign exchange fluctuations and impact of these fluctuations
- Alternative sources of supply
- Inventory control improvements
- Material flow improvements
- Labor and overhead reductions
When assessing the benefit from improved sales, production methods, you should be cautious. Improvements can take a significant period of time.
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