Inventory turnover

Cost of goods sold divided by average inventory. How many times a year the stock is sold and replaced.

The distributor turning ₹3,900 crore of cost against ₹780 crore of stock achieves five turns, which is the same statement as 73 inventory days in a different unit.

Turns are the working language of retail and distribution, because the arithmetic of the business runs on them: gross margin multiplied by turns gives gross margin return on inventory, which is what a category manager actually optimises.

Slowing turns is the first number to move when demand softens.