- 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.