Journal of Accounting and Management Information Systems (JAMIS)

Analysis of the turnover’s seasonal character and the effects on the breakeven in the construction industry

Supp/2006 ,   p671..681

Vasile ROBU

Keywords:   turnover, seasonal character, breakeven, profit, cost, additive model

The focus of the current research is the determination of the implications that the turnover’s seasonal character has on the breakeven of the firms in the construction materials field. The type of research is a case study which aims to build an additive model for separating the trend, seasonal, and random components, using time-based series to calculate the seasonal indices and the impact of seasonal factors on the turnover. The calculation of breakeven in a seasonal environment is affected by a series of factors (e.g. product’s price, amount of individual variable product cost, total amount of fixed costs) which presents a random and various evolution, generating consequences cut out for. In Romania, like in the all other countries located in the temperate clime zone, the seasonal character is mainly determined by the climatic conditions, the effect being the variation of the demand for construction materials during the year. The result of the research demonstrates that the seasonal character generates major variations in the calculation of breakeven and profit, due to some considerations based on the price policies adopted by managers (maintaining the price at a constant level in order to keep the customers and to secure the market position). All these elements lead to an unfavorable evolution during the cold season (the breakeven being situated well above the calculated turnover), and also generate a better dynamic of the turnover when compared to the breakeven during the warm season.