Inventory Turnover

Inventory turnover measures the speed at which your products sell. A high rate indicates good commercial performance and efficient management. A low rate signals overstocking and immobilization costs.

Calculation: Inventory Turnover = COGS / Average inventory. For example, $500,000 in COGS with an average stock of $100,000 gives a turnover of 5, or 5 rotations per year or about 73 days per cycle.

Standards vary by sector: 6-12 turnovers/year for fashion, 4-6 for electronics, 10-20 for food. A too slow rotation ties up cash and increases the risk of obsolescence.

Fullmetrix tracks inventory turnover by product and category, identifies your best-sellers and slow-movers to optimize your procurement and free up tied-up cash.