What is it and what is it for?
The purpose of calculating turnover is to understand how quickly your inventory is being sold on average, and how quickly you are able to recover the money you invested in it.
Turnover is the ratio of the speed of sales to the average inventory stock for the period.
Turnover report can be viewed in the Inventory > Reports > Turnover analysis section.
The report contains the following information:
- Quantity of received products
- Remaining products at the beginning and at the end of the period
- Volume of sales
- Average inventory (stock)
- Turnover in days and turnover in transactions
- Inventory level of the products
To calculate the turnover, you need to have 3 parameters:
- Period: a week, a month, a quarter or a year.
- Average inventory (stock) for the period.
- Product turnover for the period.
Average inventory (stock) for the period - the average value of the stock for the period (annual average, monthly average), is defined as:
PSav = PS1 /2 + PS2 + PS3 + PS4 + … PSn /2 n – 1
PS1, PS2, ... PSn – the size of the product stock for separate dates of the analyzed period, n is the number of dates in the period.
Turnover in days shows how many days it takes to sell the average stock.
Turnover in transactions shows how many times the product is “turned over” and sold during the period.
Inventory level of the products is the ratio of available stock to the expected average daily turnover for the upcoming period. It is calculated in days of turnover.
How to use the report?
To create a report, go to the Inventory > Reports > Turnover analysis section. Filter the list by the required items and click the "Show" button.
Filters that can be used in the report:
- Product categories
- Suppliers (partners)
The data in the Product column is presented as clickable links. Click the link in the Product column to go to the product card.
If necessary, the report can be downloaded as Excel using the "Download as Excel" button in the upper right corner.