Calculate your inventory turnover ratio

Depends on industry. FMCG: 10-15x. Apparel: 4-6x. Electronics: 6-8x. Heavy machinery: 2-4x. Compare your ratio to industry average + competitors, not absolute numbers.

Not always. Too high may mean (a) understocking (lost sales), (b) too-frequent ordering (high setup costs), (c) low margins forcing volume play. Balance turnover with profitability metrics.

Excess inventory, slow-moving SKUs, weak demand forecasting, obsolete products. Each impacts: tied-up capital, warehousing costs, carrying losses, write-downs.

Same metric, two formats. Turnover (5x) is good for comparing across industries. Days (73 days) is better for operational planning (how often to reorder).

Inventory levels fluctuate. Using just ending under-counts COGS-supporting stock. Average (begin + end) ÷ 2 is the standard. Better: monthly averages.

JIT (just-in-time) ordering, ABC analysis to focus on fast-movers, demand forecasting accuracy, faster reorder cycles, clearance of slow stock, supplier lead time reduction.

Same as days in inventory: 365 ÷ turnover. Tells you how many days you hold a typical SKU. Useful in cash conversion cycle calculation (DIO + DSO − DPO).

Yes. Lower turnover = more cash tied in stock. Higher turnover = faster cash recovery. Combine with payment terms (DPO) and receivables (DSO) for full cash conversion picture.