Operational Data
Or use: (Beginning Stock + Ending Stock) ÷ 2
Total direct production/purchase costs over the period
Days
INVENTORY HOLDING PERIOD
Inventory Turnover Ratio
Efficiency State
Inventory Turnover Formula: Cost of Goods Sold (COGS) ÷ Average Inventory.
Holding Period Formula: (Average Inventory ÷ COGS) × Number of Days in Period.
Strategic Takeaway: A lower holding period implies rapid sales velocities and lean operations, boosting cash conversion cycles. Higher durations signal potential overstocking or slowing market demand.
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Provide average stock volume and cost indices to populate operational turnover timelines.
