Soldato
- Joined
- 30 Nov 2011
- Posts
- 11,405
If you've incurred the cost of creating stock but it's not selling then your costs are higher and your revenue and profit is lower decreasing your effective margin for that periodSitting on stock doesn't negatively affect margins - stock counts as an asset.
A company's margin is the percentage difference between costs and revenue (profit), but to have that ratio you actually have to have the revenue - stock isn't revenue
If they end up having to slash prices in order to shift stock then yes it very much does affect margins on those products
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