Business Insights—Inventory Turnover Days

The Inventory Turnover Days window shows the average number of days items are in stock before being sold. This rate is calculated as follows:

Inventory Turnover rate = (Inventory divided by Cost of Sales)  x days in the specified month.

For information about how amounts are calculated and defined, see Business Insights—Introduction.

Amounts shown in this window are color coded:

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Green indicates a decrease in the inventory turnover rate from the prior period. This indicates that you are selling items at a rate similar to what you are buying at, and you are not overstocking items. However, if you notice a decrease in sales as well, it may indicate you are not stocking enough items to meet demand.

■	Red indicates an increase in the inventory turnover rate from the prior period. This indicates you may be keeping too much inventory on hand. Consider keeping fewer amounts of some items or ordering some items only when needed.

■	Blue means there has been no change in the inventory turnover rate from the prior period.

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Related Topics

■	Tracking financial information

■	Reviewing financial information