Inventory Turnover: Measure How Fast Stock Moves
Summary
Hollow Point Trading shares how inventory turnover measures product movement rather than just warehouse totals. Using $600,000 in annual cost of sales and $100,000 in average inventory at cost, the example calculates six turns per year—a useful insight for assessing inventory efficiency.
https://youtu.be/mdg9DDU6wEc
Inventory turnover measures movement, not just a warehouse total #S...
A warehouse total alone cannot tell you how quickly products move. Imagine annual cost of sales is six hundred thousand dollars and average inventory at cost is one hundred thousand dollars. Keep both measurements on a cost basis. Dividing annual cost of sales by average inventory gives six turns per year. Using a three hundred sixty five day ye...
