Inventory Turns (Finished Goods)

Inventory Turns, also known as the Inventory Turnover Ratio, measures how many times a company sells and replaces its finished goods inventory during a specific period (typically annually).

This metric helps companies compare their inventory efficiency against industry peers or established benchmarks.

NetSuite calculates the Inventory Turns (Finished Goods) using the following formulas:

Inventory Turns	=	COGS / Average Value of Finished Goods Inventory
Average Value of Finished Goods Inventory	=	(Inventory at beginning of year + Inventory at end of year) / 2

COGS: Derived from financial records (general ledger or income statement).

For example, Company A has COGS for the years as $12,500,000. The average inventory of finished goods for the year is $500,000 The Inventory Turns (Finished Goods) is calculated as:

Inventory Turns	=	$12,500,000 / $500,000
	=	$25

Related Topics

• Benchmark 360 Key Performance Indicators
• Days Cash on Hand Calculation
• Days Sales Outstanding Calculation
• Days Payable Outstanding Calculation
• Employee Turnover Rate Calculation
• COGS as a Percentage of Revenue
• Gross Margin Percentage
• Average Revenue Per Customer
• Average Revenue Per Sales Order

Related Topics

• Benchmark 360
• Setting Up Benchmark 360 SuiteApp
• Setting Benchmark 360 Preferences
• Guidelines for Creating a Custom Workbook for Benchmark 360
• Benchmark 360 Dashboard Portlets
• Benchmark 360 Products and Features
• Benchmark 360 Best Business Practices
• Benchmark 360 Limitations

General Notices