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  •     QAD Glossary

  • Inventory Turns
    The Inventory Turns KPI indicates if a business is efficiently managing and selling its inventory. The inventory turns ratio, which must be compared against industry averages, shows how many times a company’s inventory is sold and replaced over a period. Divide the days in the period by the inventory turnover formula to calculate the days it takes to sell the inventory on hand—also known as the inventory turnover days. The inventory turns ratio is calculated as:
    Inventory Turnover Ratio = Sales / Inventory
    or
    Inventory Turnover Ratio = Cost of Goods Sold / Average Inventory
    A low turnover ratio implies poor sales and, therefore, excess inventory. A high turnover ratio implies either strong sales or ineffective buying. High inventory levels are not only unhealthy because they represent an investment with a zero rate of return, but they also open the company up to trouble if prices begin to fall.
    Navigation
    The Inventory Turns for the Last 12 Months chart is linked to a grid that shows the return on inventory turns details.

    Navigation Overview for the Inventory Turns KPI
    Inventory Turns for the Last 12 Months Chart
    This chart displays the inventory turns metric for the last 12 months for the entity and currency type that you select from the parameter bar.
    Note: The source for this chart is the GL Report Line Fact table.

    Inventory Turns for the Last 12 Months Chart
    Inventory Turns for the Last 12 Months Grid
    This grid, which shows the amounts used to calculate the inventory turns ratio, contains the following columns:
    Fin Month
    Fin Month Name
    Currency Type
    COGS
    Inventory
    Inventory Turns
    Formula
    Entity Code

    Inventory Turns for the Last 12 Months Grid