![]() Indeed, your inventory turnover tells you how much and how often you are selling things in your restaurant or bar. Inventory turnover can tell you a lot of different things about your restaurant and can give you insights about where your financials are going right and wrong, making it an important ratio to calculate.Ī company’s inventory turnover is actually a good indicator of how well the business is doing and how efficient it is. For example, if in a 365-day period you sold 2 Million $ worth of goods, and your average inventory price was 200,000 $, here is how you should calculate the inventory turnover: ![]() To calculate inventory turnover you have to divide the costs of goods sold (COGS), by the average inventory value for the given time period. Inventory turnover = Net sales/Average inventory at selling price ![]() When you have this information, you can input your numbers into the inventory turnover formula. To be able to calculate stock turnover, you need to know the cost of goods sold (COGS) in the period of time that you are calculating for as well as the average cost of your inventory for that same time. In order to accurately calculate inventory turnover, there is a simple formula that you can use. This means that there is a demand for what your company is selling. When calculating inventory turnover ratio, you should be hoping to see a high number as it will indicate that your business is doing well and your inventory is sold quickly in any given time period. It also gives you insight into your purchasing habits and whether you are over or under buying your inventory. A high inventory turnover means you are selling things at a quick rate. Inventory turnover refers to how often a restaurant sells and has to restock their inventory.
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