What is Inventory Turnover?
Inventory turnover is annual COGS divided by average inventory. Higher means stock moves fast; lower means cash is tied up.
A real Kenyan example
Annual COGS KES 12m ÷ average inventory KES 1.5m = 8× per year. That is a healthy retail turnover.
Formula
Inventory turnover = Annual COGS ÷ Average inventory
Why it matters
Slow turnover means cash trapped in stock and risk of dead inventory. Fast turnover means lean operation but stockout risk.
How Veira helps
Veira reports turnover per SKU per branch, weekly. ABC analysis is one click.
FAQs
What is good turnover?
Supermarket 15-25×, pharmacy 8-12×, fashion 3-6×, electronics 6-10×.
Is higher always better?
No. Too high causes stockouts.
How is average inventory calculated?
Add opening and closing inventory, divide by 2. Or use a 13-week rolling average.
Days of inventory connection?
Days = 365 ÷ turnover. They are inverses.
Does Veira automate this?
Yes, per SKU and per branch.