Question

1. What does margin measure? Describe this in your own words. Writing a formula is not a sufficient answer. Discuss one specific way a business could increase its margin.

2.What does turnover measure? As a manager, what is one way you could improve turnover for your division?

Answer 1

Margin simply means the excess of Revenue over the cost incurred dueing a period of time.
Margin could be of 2 forms:
Gross Margin =Sales - Cost of good sold
Net Margin =Sales - Cost of good sold - Operating expenses
The margin is a profitability measure and it shows that whether the entity is profitable or not.
One of the way a business could improve its margin is by decreasing the operating expenses of the entity
Apart from the fixed expenses like depreciation and Rent, most of the operating expenses are controllable
and there expenditure could be curtailed, by this the margin of the entity improves.
Turnover is the sales of goods made or Revenue earned from providing services.
Turnover simply measures the revenue earned by the business from it's operations.It must be noted that Turnover does not
include any exceptional or one-time income. It strictly consists of the revenue generated from the regular operations of the business.
One of the way a business could improve it's Turnover is by providing various schemes or discount on the products of the business.
It may seem like providing discount is unfavourable to generating revenue but actually the reduction in price shall result into larger
volume of prodicts sold which will have a positive impact on Turnover