Inventory Turnover Calculator
Inventory turnover is a way to measure how effectively funds invested in inventory are being converted into sales revenue.
Working with your inventory turnover
Other than pure service business, almost all businesses need inventory. To effectively use your working capital, the key is to have the least inventory needed to meet the delivery expectations of your customers. Capital intensive businesses will usually have lower inventory turnover rates than other businesses. You may want to compare your rates with competitors or other companies in similar lines of business.
By monitoring changes in your inventory turnover over time, you can better understand the financial dynamics of your business and run it more effectively. Here is a worksheet you can use to track changes in this and other important measures.