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 ?
On 22 July we successfully concluded our search for a new president for Kysor Warren, who brings significant turnround experience.
Central defender Andy McLean put Berwick in front in 28 minutes only for Paul Cairney to put the home side back on terms five minutes before the turnround.
League chiefs believe the message is getting through and Smith used Sligo Rovers' "phenomenal job" in turnround ing a their financial situation as an example.
We are left to view the turnround to apparent growth at this stage as being little more than a seasonal adjustment on the first quarter.
The carers are also trained in effective patterns of working with an extremely tight turnround time for each visit which is logged and checked.
The average turnround from the time of receipt of a sample to reporting the test result was 6.
The turnround in Professional Media's performance in the second half of the
Though Sale rallied with tries from Duncan Bell and Steve Hanley, Jonny Wilkinson's sixth penalty ensured there would be no dramatic turnround.
According to Elan Zivotofsky, technology analyst at Goldman Sachs, there has been a turnround since then.
It benefits from a CIP facility for fast turnround, is easy to install (using plug-in connectors) and simple to operate.
The ready meals sector has been through a spectacular turnround, moving from 6% decline in 1998 to a very healthy 8.