From the course: Excel: Business Process Analysis
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Determine inventory turns and per-unit costs
From the course: Excel: Business Process Analysis
Determine inventory turns and per-unit costs
- [Instructor] Physical products cost money to make and money to store. In this movie, I will show you how to calculate the number of times you turn over your inventory each year as well as the cost if maintaining the inventory that you keep on hand. My sample file is an Excel workbook named inventory turns_DL, and you can find that in the chapter one folder of the exercise files collection. I have three pieces of information built into this workbook. Sales, average inventory value, in other words, the amount of items that the company has on hand at any one time, and also the annual cost of goods sold. Now you will notice that I have sales colored in red. There's a reason for that and that reason is you do not want to use sales in any of these calculations. It's a trap value. So even though you have it available, don't use it. What you want to use instead is cost of goods sold. Your inventory costs are only related…
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