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Inventory Turnover Calculator

How fast does your stock turn into cash?

Stock on a shelf is cash you cannot spend. Inventory turnover tells you how many times a year you sell through your stock, and how long each dollar waits.

Your numbers

Times stock turns in a year
6.0
Days to sell through
61
Cost of goods sold per month
$1,500.00
Cash tied up in stock
$3,000.00

Your stock sells through about every 61 days. Cash you spend on stock today comes back in about 61 days.

The kit tracks stock value for every product and shows on the dashboard how much cash is sitting on your shelves.

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How the sum works

  1. Turnover = cost of goods sold in a year divided by average stock value.
  2. Days to sell through = 365 divided by turnover.
  3. Use the cost of your stock, not its selling price, in both numbers.

Questions

What is a good inventory turnover?

It depends on what you sell. Fast-moving, low-cost goods turn many times a year. Made-to-last or seasonal goods turn slowly. Compare your own number with last year's and aim to improve it.

How do I work out average stock value?

Add the value of your stock at the start of the year to its value at the end, and divide by two. For a closer figure, average the value at the end of each month.

How do I speed up turnover?

Order smaller amounts more often, stop reordering your slowest sellers, and clear old stock so the cash can go into products that move.

This was one sum

The Back Office Kit runs all of them, for every product, together.

One Excel workbook that prices your products, tracks your stock, logs your orders and builds your invoices and wholesale line sheet. One payment of $19. Download the moment you pay.

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The dashboard tab of the Back Office Kit: revenue, profit, cash, stock value and items to reorder.

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