How to Calculate Inventory Turnover in Excel 2007


show more Calculating inventory turnover provides you with in-depth training on Business. Taught by Curt Frye as part of the Excel 2007: Financial Analysis show less
please wait ...

Calculating inventory turnover

Companies must walk a fine line between maintaining enough inventory to enable immediate sales, but without producing too many units that end up sitting in a warehouse unsold. Modern companies do their best to produce goods as needed on a just-in-time basis. So they limit their upfront investment and don't have unsold products sitting in a warehouse. The inventory turnover ratio indicates how well a company handles that problem. To calculate the inventory turnover ratio, you divide the cost of goods sold by the value of goods currently in inventory. So, I have those figures here. The cost of goods sold and the inventory, and to calculate the ratio, we divide B5, cost of goods sold, by B6, which is the inventory turnover ratio.

The inventory turnover ratio is a measure of how efficiently a company manages its production processes. One example of managing inventory is the book publishing industry. On a per unit basis, it is much less expensive to print 100,000 copies of a book than 10,00...

Calculating inventory turnover
Video duration: 1m 36s 2h 18m Intermediate

Viewers:

Calculating inventory turnover provides you with in-depth training on Business. Taught by Curt Frye as part of the Excel 2007: Financial Analysis

Subject:
Business
Software:
Excel
Author:
please wait ...