Inventory turnover
How many times you sell and replace your stock in a period. It shows whether your working capital is moving or parked on the shelf.
Inventory turnover is cost of goods sold divided by the average stock held over the same period. A turnover of six means you sold and replaced your stock six times that year.
What a good number looks like
There is no universal figure. A vegetable shop turns stock over in days; a jeweller may turn it twice a year and be perfectly healthy. Compare yourself against your own trade and, more usefully, against your own last four quarters.
Read it with the ageing report
Turnover is an average, and an average hides its worst members. A respectable overall figure can sit on top of a fast-moving half and a dead half. Turnover tells you the business is moving; ageing tells you which lines are not.
What moves the number
Ordering smaller quantities more often lifts turnover but raises the risk of a stockout and costs more in freight. Clearing dead lines lifts it immediately. Chasing the ratio for its own sake, by cutting stock on your best sellers, buys a higher number and loses sales.
How KillStock handles it
Stock valuation is tracked over time rather than only as of today, and a trends view shows sales, purchases, stock mix and valuation across periods — which is what a turnover figure needs to be read against.
A common mistake
Calculating it on closing stock instead of average stock. If your stock swings seasonally, closing stock at a low point flatters the ratio badly.