You can have KES 2 million in stock and still struggle to pay rent.
You paid for it.
It is sitting on the shelf.
It may look like an asset.
But until it sells, that cash is trapped inside the product.
Meanwhile, the business still needs money for:
- new stock
- rent
- payroll
- delivery
- marketing
- suppliers
- tax
- daily operations
This is why inventory turnover matters.
Inventory turnover tells you how efficiently a business is selling and replacing its stock over a period.
It helps answer one of the most important questions in a product business:
How quickly are we turning inventory back into sales?
A high turnover can mean stock is moving quickly.
A low turnover can mean too much cash is sitting in products that are not selling fast enough.
But the number only becomes useful when you read it with margin, stock availability, supplier lead times and demand.
Belvara view: Inventory is not productive because you bought it. It becomes productive when it moves.
What is inventory turnover?
Inventory turnover measures how many times a business sells and replaces its average inventory during a period.
A common formula is:
Inventory Turnover = Cost of Goods Sold ÷ Average Inventory
Suppose a business has:
- Cost of goods sold: KES 6,000,000
- Average inventory: KES 1,500,000
Inventory turnover:
KES 6,000,000 ÷ KES 1,500,000 = 4 times
That means the business turned over its average inventory about four times during the period.
The number does not mean every product sold exactly four times.
It is an overall average.
Why use cost of goods sold instead of revenue?
Inventory is normally recorded at cost.
That is why the standard inventory turnover formula compares:
Cost of goods sold
with:
Average inventory at cost
Using revenue against inventory at cost mixes two different measurement bases.
Suppose:
- Revenue: KES 10,000,000
- Cost of goods sold: KES 6,000,000
- Average inventory: KES 1,500,000
Using revenue would give:
6.67 times
Using COGS gives:
4 times
The second calculation is the standard inventory turnover measure because both numbers are closer to the same cost basis.
Belvara view: A ratio is only useful when the numbers inside it are measuring compatible things.
What is average inventory?
Inventory changes throughout the year.
Using only the closing inventory balance can distort the ratio.
A simple average inventory formula is:
Average Inventory = (Opening Inventory + Closing Inventory) ÷ 2
Suppose:
- Opening inventory: KES 1,000,000
- Closing inventory: KES 2,000,000
Average inventory:
(KES 1,000,000 + KES 2,000,000) ÷ 2 = KES 1,500,000
If COGS is KES 6,000,000:
Inventory Turnover = KES 6,000,000 ÷ KES 1,500,000 = 4 times
For businesses with large seasonal swings, using monthly or more frequent inventory averages can give a better picture.
A simple inventory turnover example
Suppose a homeware business has:
- Opening inventory: KES 800,000
- Closing inventory: KES 1,200,000
- Annual COGS: KES 4,000,000
Average inventory:
(KES 800,000 + KES 1,200,000) ÷ 2 = KES 1,000,000
Inventory turnover:
KES 4,000,000 ÷ KES 1,000,000 = 4 times
The business turned its average inventory roughly four times during the year.
That is the calculation.
The management question is harder:
Is four times good for this business?
The answer depends on what the business sells.
What is a good inventory turnover ratio?
There is no universal good inventory turnover ratio.
A supermarket selling fast-moving groceries may turn stock quickly.
A furniture business may turn inventory much more slowly.
A jewellery business may carry high-value pieces for longer.
A seasonal retailer may build inventory before a peak period and then sell through rapidly.
The useful comparison is usually against:
- the business’s own history
- similar product categories
- supplier lead times
- gross margin
- stockout frequency
- seasonality
- purchasing strategy
A higher ratio is not automatically better.
A lower ratio is not automatically bad.
Context matters.
High inventory turnover
High inventory turnover generally means stock is selling and being replaced relatively quickly.
That can suggest:
- strong demand
- efficient purchasing
- less cash tied up in stock
- lower holding risk
- less ageing inventory
But very high turnover can also signal that the business is carrying too little stock.
That can lead to:
- stockouts
- missed sales
- emergency restocking
- higher freight costs
- disappointed customers
Fast stock is good until it becomes no stock.
Low inventory turnover
Low inventory turnover generally means inventory is moving more slowly.
Possible reasons include:
- overbuying
- weak demand
- poor product selection
- slow-moving variants
- outdated stock
- high prices
- seasonality
- too many SKUs
- poor merchandising
- weak marketing
- inaccurate demand forecasting
Low turnover can trap cash.
It can also create:
- storage costs
- damage risk
- obsolescence
- markdowns
- write-offs
Inventory turnover and cash flow
Inventory is one of the biggest places cash can become stuck.
Suppose a business buys:
KES 1,000,000 of stock
If that stock sells quickly, cash can return to the business and be reused.
If it sits for six months, the business may need fresh cash for:
- new products
- bills
- suppliers
- payroll
The stock still has value.
But it is not liquid.
This is why slow inventory can create a cash problem even when the balance sheet looks strong.
Belvara view: The slower inventory moves, the longer the business has to survive without the cash used to buy it.
Inventory turnover and gross margin
Turnover should not be managed without margin.
Suppose Product A has:
- High turnover
- Gross margin: 10%
Product B has:
- Lower turnover
- Gross margin: 50%
Product A moves faster.
Product B earns more gross profit per shilling of sales.
Neither ratio alone tells you which product deserves more capital.
A strong inventory strategy looks at both:
How fast does it sell?
and:
How much does it earn when it sells?
Fast turnover with weak margin can still be a problem
Suppose a product sells constantly.
Revenue is strong.
Stock turns quickly.
But the margin is tiny.
The business may be:
- working hard
- restocking frequently
- handling many orders
for very little gross profit.
High turnover is operationally impressive.
It is not automatically financially attractive.
Slow turnover with strong margin can still work
Some products sell less often but generate large margins.
For example, a premium item may:
- sell fewer units
- take longer to move
- earn much more per sale
That can still be commercially sensible if:
- demand is reliable
- stock risk is controlled
- capital tied up is acceptable
- gross profit justifies the wait
The correct goal is not simply:
Make every product turn faster.
It is:
Use inventory capital well.
Inventory days
Inventory turnover can also be expressed as inventory days.
A common formula is:
Inventory Days = Number of Days in Period ÷ Inventory Turnover
If annual inventory turnover is:
4 times
Then:
365 ÷ 4 ≈ 91 days
That means the business holds roughly 91 days of inventory on average in this simplified example.
This can be easier for owners to interpret.
Instead of saying:
Turnover is 4
you can say:
We carry about three months of stock on average.
Inventory days example
Suppose turnover is:
8 times
Inventory days:
365 ÷ 8 ≈ 46 days
Suppose turnover falls to:
4 times
Inventory days become about:
91 days
The business is now holding stock for roughly twice as long.
That can significantly increase the amount of cash tied up in inventory.
Inventory turnover by product
A company-wide turnover ratio can hide large differences.
Suppose:
- Product A turns 12 times per year
- Product B turns 8 times
- Product C turns 2 times
- Product D has not sold in six months
The overall average may look acceptable.
But Product D is a capital problem.
This is why merchants should look below the total.
Useful views include:
- turnover by SKU
- turnover by category
- turnover by brand
- turnover by branch
- turnover by location
Bestsellers and inventory turnover
Bestsellers usually deserve close turnover monitoring.
A bestseller that turns quickly can generate strong cash flow.
But if stock runs out constantly, the business may be underbuying.
Suppose a product sells:
100 units per month
The business only stocks:
50 units
It sells out in two weeks.
The turnover ratio may look excellent.
But half the month’s potential demand is lost.
Selling out is not always proof that inventory is efficient. Sometimes it is proof you did not buy enough.
Slow-moving stock
Slow-moving stock is inventory that sells less frequently than expected.
It may still have value.
But it needs attention.
Useful questions include:
- When was it purchased?
- When did it last sell?
- How many units remain?
- What is the gross margin?
- Is demand seasonal?
- Is the selling price wrong?
- Is the product poorly displayed?
- Is the variant unpopular?
- Should purchasing stop?
Slow stock should not become invisible simply because it is technically still inventory.
Dead stock
Dead stock is inventory that is unlikely to sell under normal conditions.
Possible causes include:
- outdated styles
- damaged goods
- expired goods
- discontinued products
- wrong colours or sizes
- excessive purchasing
- demand disappearing
Dead stock is especially painful because cash was spent but may never return at the expected value.
The business may need:
- clearance pricing
- bundling
- write-downs
- write-offs
- alternative sales channels
Ageing inventory
Inventory ageing shows how long stock has been held.
A business might classify stock into:
- 0-30 days
- 31-60 days
- 61-90 days
- 91-180 days
- 180+ days
The appropriate buckets depend on the business.
Ageing helps distinguish:
new stock that has not had enough time to sell
from:
old stock that has been ignored
The total stock value matters. The age of the stock tells you whether that value is still healthy.
Inventory turnover and overbuying
Overbuying is one of the simplest ways to damage turnover.
Suppose a product normally sells:
20 units per month
The owner buys:
200 units
because the supplier offered a discount.
At the current sales rate, the business now has around:
10 months of stock
The unit cost may be lower.
But cash is tied up for much longer.
The discount can become expensive if the business:
- needs to borrow
- misses other buying opportunities
- has to discount the stock later
- pays storage costs
Supplier discounts can distort purchasing decisions
A supplier says:
Buy 100 units and save 10%.
The owner sees cheaper stock.
But the right question is:
How long will 100 units take to sell?
If normal demand is 10 units per month, the business bought nearly 10 months of supply.
The discount should be compared with the cost of carrying that stock.
Cheap inventory is not cheap if it traps expensive cash.
Inventory turnover and stockouts
Businesses can push turnover too far.
Suppose the business deliberately holds very little stock.
Inventory turnover rises.
But stockouts increase.
Customers hear:
- sold out
- restocking soon
- unavailable
- preorder only
The business may lose sales.
A strong inventory strategy balances:
- cash efficiency
- product availability
Reorder points matter
A reorder point tells the business when to reorder stock.
A simple concept is:
Reorder Point = Demand During Lead Time + Safety Stock
Suppose:
- average sales: 5 units per day
- supplier lead time: 10 days
- safety stock: 20 units
Demand during lead time:
5 × 10 = 50 units
Reorder point:
50 + 20 = 70 units
When stock reaches around 70 units, the business may need to reorder.
The exact model should reflect real demand variability and supplier reliability.
Supplier lead time changes the ideal turnover
Suppose Product A can be restocked in:
2 days
Product B takes:
90 days to import
The business can safely carry less Product A.
Product B may require deeper inventory.
That can reduce turnover.
But it may be necessary to avoid long stockouts.
This is why turnover cannot be optimised without supplier lead time.
Imported stock changes the inventory decision
A Kenyan merchant importing stock may face:
- manufacturing time
- international freight
- customs and clearing time
- unpredictable delays
- minimum order quantities
A low-stock strategy may be dangerous if replenishment takes months.
The business may need more inventory than a local supplier model.
That can reduce turnover while still being operationally sensible.
Inventory turnover and seasonality
Seasonal businesses can look inefficient before peak demand.
Suppose a business builds inventory in October for December.
Inventory rises before the sales arrive.
Turnover temporarily falls.
Then December sales accelerate.
Looking at one month in isolation could create the wrong conclusion.
Seasonal inventory needs seasonal context.
Seasonal leftovers are where risk appears
Buying ahead of a peak period is normal.
The danger is what remains afterward.
Suppose the business buys:
KES 1,000,000
of seasonal stock.
After the season:
KES 350,000 remains
If demand drops sharply, that stock may sit for months.
The real purchasing lesson is not only:
Did we sell well?
It is:
How cleanly did we exit the season?
Inventory turnover and product lifecycle
Products move through stages.
A new product may initially turn slowly.
A growing product accelerates.
A mature bestseller may turn consistently.
A declining product can slow sharply.
This means the business should not treat a product’s historical turnover as permanent.
Demand changes.
Too many SKUs can weaken turnover
A business can grow its catalogue faster than customer demand.
Suppose the owner adds:
- more colours
- more sizes
- more brands
- more variants
Total sales remain similar.
Demand is now spread across more SKUs.
Each SKU turns more slowly.
The catalogue looks richer.
Cash becomes more fragmented.
More choice can make the shelf look stronger while making inventory productivity weaker.
SKU productivity
A useful inventory review asks:
- Which SKUs generate most revenue?
- Which generate most gross profit?
- Which turn fastest?
- Which are always out of stock?
- Which barely sell?
- Which absorb the most cash?
- Which have been reordered despite weak demand?
This moves inventory management from:
What do we have?
to:
What is our stock doing for the business?
ABC inventory analysis
ABC analysis groups inventory by importance.
A common approach is:
- A items: highest-value or most important items
- B items: medium importance
- C items: lower-value items
The exact method can vary.
The purpose is to avoid giving every SKU equal management attention.
A small number of products may drive a large share of sales or gross profit.
Those items deserve tighter stock control.
Inventory turnover and purchasing
Purchasing decisions directly affect turnover.
If buyers order faster than customers consume stock:
- inventory rises
- turnover falls
- cash becomes trapped
If buyers order too conservatively:
- inventory falls
- turnover may rise
- stockouts can increase
Good purchasing uses real demand, not excitement about new stock.
Inventory turnover and markdowns
Markdowns can increase turnover.
Suppose a slow product is reduced from:
KES 2,000
to:
KES 1,600
Sales accelerate.
Inventory turns faster.
But margin falls.
This may still be the right decision if the alternative is holding the stock for another six months.
The goal is not protecting the original price at all costs.
The goal is making the best use of the capital already committed.
Clearance can free more than shelf space
Suppose old inventory cost:
KES 300,000
The business clears it for:
KES 250,000
The business may accept a lower margin or even a loss.
But it recovers KES 250,000 of cash.
That cash can now be used for a product with stronger demand.
Clearance can therefore be a capital-allocation decision, not merely a sales promotion.
Inventory write-downs
Sometimes inventory is worth less than the amount recorded in the books.
This can happen because of:
- damage
- obsolescence
- price declines
- expiry
- weak demand
Applicable accounting standards can require inventory to be carried at an appropriate recoverable amount.
The exact accounting treatment depends on the reporting framework.
The management lesson is simpler:
Old stock should not be allowed to pretend it is worth more than the market will realistically pay.
Inventory turnover and write-offs
A write-off happens when inventory value needs to be removed because stock is no longer usable or recoverable.
Examples can include:
- destroyed items
- expired stock
- missing stock
- unrecoverable damage
Write-offs reduce the economic value of inventory.
They also expose purchasing, handling or control problems.
Inventory turnover by branch
A multi-location business can have very different stock movement by branch.
Suppose Product A:
- sells fast in Branch 1
- sells slowly in Branch 2
A company-wide view may hide the imbalance.
The business may not need more stock.
It may need to move existing stock between locations.
Stock transfers can improve turnover
If one branch is overstocked and another keeps selling out, a stock transfer may solve both problems.
That can:
- reduce dead stock
- prevent stockouts
- avoid unnecessary new purchases
- release working capital
This requires accurate inventory visibility by location.
Inventory accuracy matters
Turnover calculations are only as good as the inventory records underneath them.
If the system says:
KES 2,000,000 inventory
but physical stock is actually:
KES 1,600,000
the turnover ratio is wrong.
Possible causes include:
- theft
- damage
- unrecorded sales
- unrecorded write-offs
- receiving errors
- stock transfer errors
Inventory counts and reconciliations matter.
Inventory shrinkage
Shrinkage is inventory loss that is not explained by normal sales.
It can result from:
- theft
- damage
- fraud
- administrative error
- lost stock
Shrinkage can distort:
- inventory value
- gross profit
- turnover
A business cannot manage inventory productivity if it does not know what stock actually exists.
Inventory turnover and cash conversion cycle
Inventory turnover connects directly to the cash conversion cycle.
The cash conversion cycle considers how long cash is tied up between:
- paying suppliers
- holding stock
- collecting customers
Inventory days are one part of that cycle.
A shorter inventory holding period can return cash faster.
But the business still needs enough stock to meet demand.
Inventory turnover for cash-sale businesses
For a cash-sale retailer, inventory is often the biggest working-capital asset.
Customer payment may be immediate.
That means the key delay is often:
Cash → Stock → Sale → Cash
The faster good inventory moves, the faster cash can cycle.
Inventory turnover for credit-sale businesses
For a wholesale or B2B merchant, the cycle can be longer:
Cash → Stock → Sale → Receivable → Cash
Even if inventory turns quickly, customer payment may be slow.
That means inventory turnover should be read beside accounts receivable.
Inventory turnover and accounts payable
Supplier credit can offset some inventory pressure.
Suppose:
- stock sells in 30 days
- supplier is paid in 60 days
The business may collect sales cash before paying the supplier.
That can be very efficient.
Now reverse it:
- stock sells in 90 days
- supplier is paid in 30 days
The business funds around 60 days of inventory from its own cash.
Same product margin.
Very different cash requirement.
Inventory turnover in retail
Retailers should watch turnover by:
- category
- SKU
- location
- season
- supplier
A single annual ratio is not enough.
For a retailer, turnover can help expose:
- dead stock
- overbuying
- bestseller stockouts
- poor category performance
- trapped cash
Inventory turnover in wholesale
Wholesale businesses may carry:
- larger order quantities
- lower margins
- customer credit
- supplier credit
Turnover matters because small efficiency changes can affect large amounts of cash.
A product taking 90 days instead of 45 days to move can double the inventory holding period.
Inventory turnover in manufacturing
Manufacturers can hold:
- raw materials
- work in progress
- finished goods
Each behaves differently.
A total inventory turnover ratio can be useful, but deeper analysis may be needed to identify where the delay sits.
Is raw material piling up?
Is production slow?
Are finished goods not selling?
Inventory turnover in restaurants
Restaurants and food businesses often need fast inventory turnover because goods can be perishable.
Slow stock can create:
- spoilage
- waste
- expiry
- margin loss
But the useful turnover target depends heavily on the type of ingredient and operating model.
Inventory turnover in ecommerce
Ecommerce merchants can have a strange inventory problem.
The website may look unlimited.
The warehouse is not.
Too much variety can create many slow SKUs.
Too little depth in bestsellers creates stockouts.
Turnover should therefore be read with:
- conversion
- demand
- stock availability
- supplier lead time
- fulfilment
What can cause inventory turnover to fall?
Turnover can fall because:
- inventory increased faster than sales
- demand weakened
- purchasing became too aggressive
- prices are too high
- product mix changed
- seasonality shifted
- old stock accumulated
- new SKUs were added faster than demand
- supplier minimum quantities increased
- stock records are inaccurate
A falling ratio is a signal.
It is not a diagnosis.
What can cause inventory turnover to rise?
Turnover can rise because:
- demand increased
- purchasing improved
- old stock was cleared
- inventory levels were reduced
- pricing improved
- marketing worked
- product mix improved
- stock was transferred to stronger locations
It can also rise because inventory is too low.
Always check stockouts.
Common inventory turnover mistakes
1. Assuming higher is always better
Very high turnover can mean stockouts.
2. Assuming lower is always bad
Some categories naturally move slowly.
3. Using revenue instead of COGS
The standard ratio uses cost of goods sold.
4. Using only closing inventory
Average inventory is usually more representative.
5. Looking only at the total business ratio
Weak SKUs can hide inside a healthy average.
6. Ignoring margin
Fast-selling low-margin products are not automatically the best use of cash.
7. Ignoring supplier lead time
A slow-import product may require deeper stock.
8. Ignoring seasonality
Inventory build-up before peak demand can be intentional.
9. Buying too much for discounts
A lower unit cost can create a bigger cash problem.
10. Ignoring inventory accuracy
Bad stock records produce bad turnover metrics.
How to improve inventory turnover
Stop reordering slow stock automatically
A reorder should be earned by demand.
Buy deeper into proven winners
Strong products deserve availability.
Buy cautiously into unproven products
Test demand before committing large amounts of cash.
Review ageing regularly
Old stock needs decisions.
Clear stock deliberately
Markdowns, bundles and alternative channels can release cash.
Improve forecasting
Use actual sales patterns rather than intuition alone.
Match purchasing to lead times
Long lead times need different stock depth from local replenishment.
Transfer stock between branches
Move inventory toward demand before buying more.
Track stockouts
Do not improve turnover by simply starving the business of inventory.
Review turnover with margin
The best product often combines healthy demand with healthy economics.
How Belvara helps you understand inventory turnover
Inventory turnover becomes much more useful when it is connected to the records behind it.
Belvara helps keep inventory, sales, purchasing and related business records closer together so the owner can see not only how much stock exists, but how that stock is moving.
See which products are actually moving
A total inventory value cannot tell you which products deserve more capital.
Product-level sales and stock visibility help separate:
- fast movers
- slow movers
- dead stock
- products at risk of stockout
Read stock beside sales
Inventory only makes sense in the context of demand.
Keeping sales and stock closer together helps show where the business is holding too much or too little.
See ageing before it becomes a write-off
Old inventory usually becomes expensive gradually.
Age visibility helps the owner act before stock has to be heavily discounted or written off.
Read purchasing beside movement
A product may be slow because demand is weak.
Or because the business simply bought too much.
Connecting purchasing history to stock movement helps reveal the difference.
Keep branch and location stock visible
Where relevant, stock by location can show whether the business needs to buy more or simply move inventory to where customers are already buying.
Belvara view: Inventory turnover should not only tell you how fast stock moved. It should help you decide where the next shilling of inventory money should go.
The better inventory question
Many owners ask:
How much stock do we have?
That matters.
But it is incomplete.
A better set of questions is:
- How fast is it moving?
- Which products are trapping cash?
- Which products keep selling out?
- Which categories deserve more capital?
- Which stock is getting old?
- How long will current stock last?
- Can we replenish quickly?
- Are we buying faster than customers are buying from us?
Inventory turnover helps turn a stock count into a capital-allocation decision.
The takeaway
Inventory turnover measures how efficiently a business sells and replaces inventory over a period.
A common formula is:
Inventory Turnover = Cost of Goods Sold ÷ Average Inventory
Inventory days can be calculated as:
Inventory Days = Number of Days in Period ÷ Inventory Turnover
High turnover can indicate strong demand and efficient stock use.
Low turnover can indicate slow stock, overbuying or weak demand.
But neither is automatically good or bad.
The ratio should be read with:
- gross margin
- stockouts
- supplier lead time
- seasonality
- inventory ageing
- customer payment timing
- supplier payment timing
The wrong question is:
“How much inventory do we own?”
The better question is:
“How quickly is that inventory turning back into cash, and is it earning enough while it does?”
Because inventory is not valuable merely because it is on the shelf.
It is valuable when the business can sell it profitably, replenish intelligently and keep the cash moving.
Frequently Asked Questions About Inventory Turnover
What is inventory turnover in simple terms?
Inventory turnover shows how many times a business sells and replaces its average inventory during a period.
What is the inventory turnover formula?
A common formula is:
Inventory Turnover = Cost of Goods Sold ÷ Average Inventory
How do you calculate average inventory?
A simple formula is:
Average Inventory = (Opening Inventory + Closing Inventory) ÷ 2
Why does inventory turnover use COGS instead of revenue?
Inventory is generally recorded at cost, so comparing it with cost of goods sold provides a more consistent measurement basis.
Is high inventory turnover good?
It can be. High turnover can indicate strong demand and efficient inventory use, but extremely high turnover may also signal understocking.
Is low inventory turnover bad?
Not always. Some products naturally sell more slowly. But low turnover can also signal overbuying, weak demand or ageing stock.
What are inventory days?
Inventory days estimate how long inventory is held before sale on average.
How do you calculate inventory days?
A common formula is:
Inventory Days = Number of Days in Period ÷ Inventory Turnover
What is slow-moving inventory?
Slow-moving inventory is stock that sells less frequently than expected.
What is dead stock?
Dead stock is inventory that is unlikely to sell under normal conditions.
What is inventory ageing?
Inventory ageing groups stock by how long it has been held.
Can inventory turnover be too high?
Yes. If inventory is too low, a very high turnover ratio can come with frequent stockouts and missed sales.
Can inventory turnover be too low?
Yes. Slow turnover can tie up cash and increase storage, markdown and write-off risk.
How does inventory turnover affect cash flow?
Faster healthy turnover generally returns cash invested in stock to the business sooner.
Does gross margin matter when looking at inventory turnover?
Yes. A fast-selling product with weak margin may be less attractive than a slower product with stronger economics.
How do supplier lead times affect inventory turnover?
Long replenishment lead times may require the business to hold more stock, which can reduce turnover.
How do stockouts affect inventory turnover?
Low inventory can increase turnover mathematically while causing missed sales, so stock availability should be reviewed alongside the ratio.
How can a business improve inventory turnover?
It can improve purchasing, reduce overstocking, stop automatic reorders on slow items, clear ageing stock, improve forecasting and keep bestsellers available.
How does Belvara help with inventory turnover?
Belvara helps keep inventory, sales, purchasing and related business records closer together so the owner can see which stock is moving, which is ageing and where inventory capital may be getting trapped.
What should I learn after inventory turnover?
Useful next concepts include inventory days, COGS, gross margin, stock ageing, reorder points, working capital, cash conversion cycle and stock valuation.