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Retail & Allocation lesson

Stock-to-sales and turnover

One month across the chain, by category. Stock-to-sales compares stock with sales. Turnover shows how many times the stock sold through.

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About 5–10 minutes · no sign-up needed

The idea

One month across the chain, by category. Stock-to-sales compares stock with sales. Turnover shows how many times the stock sold through:

Formulas

Opening stock ÷ Sales
Cost of goods ÷ Avg inventory

Key points

Stock-to-salesOpening stock ÷ Sales for the month. 3.0 means three months' worth.
Inventory turnoverCost of goods sold ÷ Average inventory at cost.
Higher turnsLess cash tied up in stock. Too high can mean empty shelves.

Turnover compares cost with cost. Never mix retail prices with cost prices in one ratio.

Practice

Try each one in your head first, then open the answer.

1. What is the stock-to-sales ratio for Chargers?
$45,000 ÷ $15,000 = 3.0
2. In D2, work out Audio's stock turnover: cost of goods ÷ average inventory.
=B2/C2
3. What is inventory turnover for Cases this month?
$8,000 ÷ $4,000 = 2.0 turns
4. Tap the category with the most stock tied up for its sales.
Screen guards hold 4 months of stock.

Learn it by doing. This lesson is a short hands-on level on Bampaa: see it work, then build and write it yourself, with instant feedback.

Try this lesson free →
About 5–10 minutes · no sign-up needed