Reading Your Inventory Reports: 5 Numbers That Matter
Stock turnover, days of cover, gross margin, shrinkage and sell-through — what each tells you and when to act.
Tolu Adewale 6 min read
Product Manager
Stock turnover
Cost of goods sold divided by average inventory value. Higher usually means cash is working harder.
Days of cover
How many days current stock will last at the current sales rate. Too low risks stock-outs; too high ties up cash and risks expiry.
Gross margin and shrinkage
Track margin by category and shrinkage by branch. Both reveal problems long before they show up in your bank balance.
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