Assume a company has the following data for the year:
Inventory turnover is a vital metric that reflects your business's ability to sell and replenish its stock efficiently. By calculating how quickly you convert inventory into sales, you gain valuable insights into your sales performance, supply chain health, and overall financial performance.
A healthy inventory turnover generally means strong sales, optimized cash flow, and reduced holding costs. However, striking the right balance is key—excessive turnover might lead to stockouts, while a low turnover can indicate overstocking or weak sales.
As a global sourcing company, The Sourcing Co. understands the importance of inventory management. We can help you optimize your inventory turnover by providing efficient sourcing solutions, improving supply chain visibility, and offering data-driven insights.