1. What is Monthly Turnover?

Monthly turnover, also known as inventory turnover, measures how many times a company's inventory is sold and replaced over a month. It indicates the efficiency of inventory management and sales performance.

2. How Does the Calculator Work?

The calculator uses the monthly turnover formula:

Where:

• \( \text{Sales}_{\text{month}} \) — Total sales for the month (currency)
• \( \text{Average Inventory}_{\text{month}} \) — Average inventory value during the month (currency)

Explanation: The ratio shows how efficiently inventory is being managed - higher values indicate faster inventory turnover.

3. Importance of Monthly Turnover

Details: Monthly turnover helps businesses assess inventory management efficiency, identify slow-moving items, optimize purchasing decisions, and improve cash flow.

4. Using the Calculator

Tips: Enter total monthly sales and average inventory value in the same currency. Both values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: What is a good monthly turnover ratio?
A: Ideal ratios vary by industry. Generally, higher is better, but too high might indicate insufficient inventory levels.

Q2: How is average inventory calculated?
A: Average inventory is typically calculated as (Beginning Inventory + Ending Inventory) / 2 for the month.

Q3: What's the difference between monthly and annual turnover?
A: Monthly turnover provides more frequent insights, while annual turnover shows yearly trends. Monthly data can reveal seasonal patterns.

Q4: Can turnover be too high?
A: Exceptionally high turnover might indicate stockouts or lost sales opportunities from inadequate inventory levels.

Q5: How can I improve my turnover ratio?
A: Strategies include better demand forecasting, promotions for slow-moving items, and optimizing inventory levels.