Inventory ratio analysis
model is easy to follow financial template to calculate vital Inventory ratios for current year.
The model includes:
- Roll forward Inventory Balance Sheet Schedule;
- 12 mo Cost of Goods Sold;
- 12 mo Inventory additions;
- 12 mo Avg Inventory additions
- 12 mo Avg Net Inventory
- Inventory Turnover ratio calculations
- how many times Inventory is over during 12 months period; the ratio is activity ratio that shows company effectiveness in managing its inventory levels;
A low turnover ration may indicate overstocking, obsolescence, or low market demand for the product. High turnover ration may indicate inadequate inventory level and potential inability to answer customer depend on time. However, you always need to compare your company Inventory Turnover ration to that of the industry that your company is in.
- # of Months Supply
– number of months supply of inventory.