turnround


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turnround

a situation where a firm or a division of a firm that has been experiencing a protracted decline in profits is able to institute measures which not only halt the decline but form the basis of a sustained recovery in its profitability A turnround situation reflects something more than a downturn in profits associated with the BUSINESS CYCLE which affects to a greater or lesser degree most companies operating in a particular activity In essence it is a crisis situation which is firm-specific, reflecting various internal problems: ineffectual management (an autocratic chief executive, an unbalanced management team, lack of attention to the formulation of BUSINESS STRATEGY), poor financial structure (an inappropriate capital GEARING level), poor financial control (unsystematic allocation of overhead costs, lack of information on which products are generating cash and which ones are making losses) etc. All these factors can contribute to a lack of efficiency, higher costs, loss of competitive vigour and a failure to respond adequately to the changing needs of the market.

Recovery can only be achieved if there is a willingness and ability to identify the major sources of the firm's problems, followed by the initiation of action programmes involving managerial, administrative and financial reorganization, cost reduction and better directed marketing efforts aimed at re-establishing COMPETITIVE ADVANTAGE over rival suppliers. A tardiness or failure to implement appropriate turnround measures may well end in insolvency. However, before this point is reached the firm may well be TAKEN OVER, or in the case of a division, divested. See DIVESTMENT, ENDGAME STRATEGY.

References in periodicals archive ?
Mid-term policy changes do seem to have produced a very favourable balance of payments response: where the earlier policy phase was contributing a deficit of some [pound]1,000 m at annual rates, the turnround produced a swing of some [pound]4,000 m.
The turnround since then had its most direct effect on the stocks of the western companies most exposed to China for revenues, and on the prices of commodities that China buys.
Is a successful turnround of an under-performing school more dependent on the academy name-change, or is it about appointing a recognised turn-round specialist like Joy Ballard?
BEFORE the Brighton game, I wondered how many sleeps it was going to be before a Boro turnround.
Patch Northover converted his own try to give the Moorefields men a flying start and, having slotted home a penalty, added the extras to Leigh Cleary's sprint finish for a comfortable 17-3 lead at the turnround.
8m owed to secured creditors - believed to include finance house Burdale and turnround group GA Europe - are likely to be paid.
The entrepreneur has delivered a huge turnround at the group with a 31.
The turnround has been achieved by "cutting costs, going back to basics, and running everything in a straightforward and efficient manner, with a very good team", Jockey Club chief executive Simon Bazalgette said yesterday.
They managed to turnround the scoreline to evenutually to win 5-4 against Durham University with a penalty stroke fired home by Hollie Webb in the final seconds.
It represents a stunning turnround for the 23-year-old who missed the halfway cut in his first seven tournaments this year and it was not until the last day of his season he avoided a trip to qualifying school.
Unless there is a very fast turnround in the pound's future we are going to miss the boat and we will all (except the rich who invest all their money abroad) be worse off.
But just how has Ashton wrought the remarkable turnround in England's fortunes since that sobering first meeting?