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Inventory & Stock Turnover Analyzer

Sales & Period Data
$
The direct costs attributable to the production of goods sold.
Usually 365 for a full year, 90 for a quarter, or 30 for a month.
Inventory Valuation
$
$
%
Standard is 20-30% (covers storage, insurance, depreciation).
Inventory Turnover Ratio 0.0x Times stock sold per period
Days Sales of Inventory (DSI) 0 Days to clear inventory
Average Inventory Value $0.00 Capital tied up in stock
Estimated Holding Costs $0.00 Money lost to storage & decay
Inventory Health Insights
  • Awaiting data input to generate strategic insights.
Velocity & Trend Matrix

Capital Velocity (COGS/Day)

$0.00
Cost of goods sold daily

Holding Cost per Day

$0.00
Daily drain on profits

Stock Level Trend

--
Beginning vs Ending

Turnover Grade

--
Based on general retail
Inventory Capital Allocation
Inventory Volume Trend
Lean Inventory Simulator
Simulate reducing your average inventory levels (e.g., through Just-In-Time ordering) to see how much cash you can free up for growth.
Target Average Inventory Reduction 0%
New DSI
0 Days
New Holding Cost
$0.00
Immediate Cash Freed Up
$0.00

The Definitive Guide to Inventory Turnover Optimization

For product-based businesses, inventory is often the largest asset on the balance sheet. However, if that inventory sits idle in a warehouse, it rapidly becomes a liability. The Mahato Traders Stock Turnover Analyzer helps you measure capital velocity—how fast your cash tied up in goods is converted back into liquid cash.

Why Days Sales of Inventory (DSI) is Critical

DSI translates your turnover ratio into an easily understandable timeframe. If your DSI is 90 days, it means your current stock will last you 3 months. In fast-fashion or perishables, a 90-day DSI is fatal (due to spoilage or trend changes). In heavy machinery, 90 days might be excellent. By lowering your DSI, you reduce warehouse space requirements, lower insurance premiums, and minimize the risk of "dead stock".

Understanding Holding Costs

Many businesses only look at the purchase price of goods. They ignore Holding Costs. Industry standard dictates that holding costs represent 20% to 30% of the inventory value per year. This includes:

Frequently Asked Questions (FAQ)

Inventory turnover is a financial ratio showing how many times a company has sold and replaced inventory during a given period. It helps businesses understand how efficiently they are managing their stock.

The standard formula is: Cost of Goods Sold (COGS) divided by Average Inventory. Average Inventory is calculated by adding Beginning Inventory and Ending Inventory, then dividing by 2.

DSI indicates the average number of days it takes for a company to turn its inventory into sales. A lower DSI means it takes fewer days to sell out the inventory, which is generally better for cash flow.

It heavily depends on the industry. Supermarkets might have a turnover of 15-20x (selling out fast), while luxury car dealers might have a turnover of 2-3x. Generally, a ratio between 4 and 6 is considered healthy for standard retail.

A low ratio implies weak sales and excess inventory. This leads to high holding costs, tied-up cash flow, and a higher risk of stock becoming obsolete or expiring before it can be sold.

Yes. An extremely high turnover ratio might mean you aren't carrying enough inventory, leading to frequent stockouts. This results in lost sales and frustrated customers who go to competitors.

Holding costs (or carrying costs) are the expenses associated with storing unsold inventory. This includes warehousing space, insurance, security, depreciation, and the opportunity cost of the capital tied up in the stock. It's typically estimated at 20-30% of the inventory value per year.