Inventory Turnover Calculator

What can knowing your inventory turnover do for you?

By knowing your inventory turnover ratio, you as a business can better determine how much of your inventory is turning into profits.

With this number you can compare it to industry benchmarks, and optimize your operations to become more efficiency.

Is it possible to have a high/low inventor turnover ratio?

High turnover: This may result in a lot of ‘out-of-stock’ situations which can negatively impact your customers satisfaction, as well as your business earnings.

Low turnover: If your business has a low turnover this may cause your business to be strained when it comes to cash flow, and this makes it harder to grow or re-invest into other parts of the business.

How would you decrease/increase your inventory turnover?

If you’re looking to either increase or decrease your inventory turnover because its beyond industry benchmarks, here are a few ways you can approach this.

Decreasing inventory turnover: By increase your prices, focusing on inventory that drives the most business, negotiate with suppliers, and finding ways to lower your advertising costs (customer-acquisition-cost).

Increasing inventory turnover: Try to increase the amount of stock available for high-demand products, decrease marketing spend, add more product variations can spread customer interest (ex: different colors).