The Inventory Turns Dashboard displays Value, Profit, GP%, Turns, and GMROI for each individual product while letting you break down the information shown in the graph by Warehouse, Vendor and Product Line. Data is updated daily.
Inventory turnover is how many times you sell all, or ‘turn over’ all of the inventory for a product in 12-months.
This ratio shows how efficiently your company sells through products. Generally, a high turnover is beneficial because it means you are stocking an appropriate amount of inventory to keep pace with sales.
Open this Dashboard as described in Review inventory KPIs
- Turns are the number of times per year the product is ordered from the vendor. Yearly average is calculated as your
12 Month Total Cost of Sales/12 Month Average Inventory Value
In general, higher numbers equals more turns, which represent higher sales. This calculation is performed at the close of each individual month, to which Inform then applies a running average. For the average across 12 months, each calculated monthly average is applied over the total cost of sales to result in the annual value. - Gross Margin Return on Investment is calculated using the following formula:
GMROI = GrossMargin/AverageInventoryCost
Please note that these calculations are based off of your Company Master: Pricing/Costing, Sales Order GP% Cost Column. This may result in discrepancies between the values shown here and those on your Inventory Value Report.
With a goal of greater than 1.2, with 1 indicating the product was sold at cost + .2 for the carrying costs.
All figures are based on a rolling 12 month period. If the item does not have at least 12 months of history, these fields will appear blank.
To review details about return on investment, click the View Detail button.
In addition to the Product Code (which you can click to open product details), Product Line, and Description, you will find details on:
- Value: The current inventory dollar value based on the Sales Order GP% Cost Column set under the Pricing/Costing tab in the Company Master.
- Profit: Total 12 month profit dollars.
- GP % : Gross Profit Percent.
- Turns: The number of times a product is ordered in the past 12 months. Calculated as 12 Month Total Cost of Sales divided by the 12 Month Average Inventory Value for the product. This field must have 12 months of data to populate.
- GMROI: Gross Margin Return on Investment= (Gross Margin/Average Inventory Cost)/. All figures based on a 12 month rolling period. If an item does not have 12 months of history, this data will not appear. This important metric measures how well your business is turning inventory into sales, above the cost of the inventory.
- In the example above, the first product, ¾” copper tubing, has a healthy 2.83 GMROI. That means that $2.83 was earned for every dollar spent on this product over the past 12-months.
- By contrast, the 1 ½” copper tubing has a GMROI of .55, which means that only 55 cents was earned for every dollar invested in this product over the past 12-months.
See also