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Comment on KPI Series – Inventory Turnover Ratio by K S Dinesh Kumara

K S Dinesh Kumara — Tue, 10 Nov 2009 13:33:36 +0000

Thank you so much,

As per could you pls. help us how to calculate the Inventory ageing.

Comment on KPI Series – Inventory Turnover Ratio by survivalware

survivalware — Mon, 09 Nov 2009 21:00:19 +0000

One is really the inverse of the other. Inventory Turnover is a measure of how quickly you move merchandise if you are a retailer, or cost of goods if you are a manufacturer. You take your cost of sales over a full year, and divide by the average inventory to get this number. The higher the number the better.

Days of inventory is a measure of how long it would take you to run out of stock if you didn’t reorder. It is calculated by taking the average inventory and dividing by daily cost of sales to express the number in days. In general, the smaller this number the better.

Comment on KPI Series – Inventory Turnover Ratio by K S Dinesh Kumara

K S Dinesh Kumara — Fri, 06 Nov 2009 18:27:43 +0000

We wanted to know difference between the Inventory turn over and days inventory on hand.

Comment on KPI Series – Inventory Turnover Ratio by Rusty Luhring

Rusty Luhring — Sun, 25 Oct 2009 14:04:43 +0000

The calculation should be the same whether for a retailer or a Hospital that carries inventory (supplies, I assume). If you have good inventory and COGS numbers by department, I would calculate it by department.

Here’s the calculation:

Inventory Turnover = Annual Cost of Goods Sold / Average Inventory

For Months:

Annual Cost of Goods Sold = Average Monthly Cost of Goods Sold (based on 3 month moving average) times 12

Average Inventory = the average of Last Month’s Inventory and This Month’s Inventory

For Quarters, Year to Date Periods, Year Totals:

Annual Cost of Goods Sold = Cost of Goods Sold for the time period divided by the number of months and times 12

Average Inventory = the average of Each Month’s Ending Inventory balance within the time period (e.g. for the first quarter it would be the average of Jan, Feb, and Mar ending inventory)

Comment on KPI Series – Inventory Turnover Ratio by pradip Bhattacharjee

pradip Bhattacharjee — Sun, 25 Oct 2009 12:46:47 +0000

1) how would I calculate inventory turnover ratio for a hospital stores?
2) shall I take the issues to various dept. as COGS ?

Comment on KPI Series – Inventory Turnover Ratio by Rusty Luhring

Rusty Luhring — Fri, 02 Oct 2009 20:01:47 +0000

Christy,
The standard financial model that comes with SurvivalWare would not be able to handle 1,000 SKUs, but a custom model probably could. We’ll be happy to give you a quote once we find out more about your specific needs (e.g. where is the data coming from, in what format, etc.)
– Rusty

Comment on KPI Series – Inventory Turnover Ratio by Christy Loftus

Christy Loftus — Fri, 02 Oct 2009 18:38:54 +0000

Rusty,

We have approximately 1000 sku’s and would like to know the turnover rate on each item and a 12 month rolling sales history by month or days of sale per item, will this software be able to help us?

Christy

Comment on KPI Series – Inventory Turnover Ratio by survivalware

survivalware — Thu, 25 Jun 2009 01:56:03 +0000

The problem with using one month COGS and multiplying by 12 is that the volatitily of sales is accentuated. It is an acceptable formula. However, I favor something like a 3 month average to smooth things out a bit.

Comment on KPI Series – Inventory Turnover Ratio by Ryan McNutt

Ryan McNutt — Mon, 22 Jun 2009 21:52:12 +0000

I have two questions about computing a Monthly Inventory Turnover Ratio for a retail product that has consistent unit sales, but can have major monthly variations in cost. As a side note our Inventory is computed at cost.

This is the formula I’ve proposed to compensate for the cost swings from month to month and still give us an inventory turn number:

Take just that months COGS multiplied by 12 and then divided by that months ending Inventory.

The two questions:

Is this an acceptable formula?

What are the flaws of using one months COGS and multiplying by 12?

Comment on SurvivalWare Version 3.0 by Avertedd

Avertedd — Tue, 26 May 2009 07:47:15 +0000

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