How to calculate the turnover of goods

The turnover of the goods you can count in days or in times. In the first case, the turnover shows how many days it takes for sales average inventory. It is defined as the ratio of product of average inventory and number of days in the month to trade over that period. For example, the average stock of washing powder was 160 units and the sale of 320 units. So the turnover will be: 160*31/320 = 15,5 (days), i.e. the need for 15.5 days to sell the average stock of this powder.

Note that by itself, the turnover ratio does not allow to draw any conclusions. Analyze its dynamics, for example, if turnover was 10 days and was 15, it talks about the need to reduce the quantity of imported merchandise or to increase sales. If, on the contrary, this indicator decreased, the product began to turn around faster.

Rate ratio turnover in days and the credit period for the goods. If the loan is granted for 30 days, and the turnover period of 15 days, so during this period we will refund the invested funds and will be able to pay off her debt. If the loan is granted for 10 days, and the turnover amounted to 15 days to return the loan, we will have to use borrowed money, because investing in this product has not yet come back.

Another conclusion, which you can do by turnover to estimate the frequency of replenishment. When the turnover of goods in 15 days stock should be replenished twice a month.

Turnover times indicates how many times per period the product turned, i.e. has been sold. It is calculated as the ratio of trade over the period to the average stock of goods during this period. For example, the stock of washing powder was 160 units and the sale of 320 units, so the turnover will be equal to: 320/160 = 2, i.e., the stock item will be fully implemented two times per month.