What formula is used to calculate a Stock Turn?

Stock Turn = Current Cost Of Goods Sold / Average Inventory Cost

CurrentCostOfGoodsSold = SUM of all Sales - SUM of all Credits, during the past year up to the current date.
Average Inventory Cost = ((Previous Year On Hand Quantity * Previous Year Average Landed Cost) + (Current On Hand Quantity * Current Average Landed Cost)) / 2

Current Cost Of Goods Sold

You can get a product's current cost of goods sold value using the Total Values that are calculated in the Transaction Enquiry, when filtered for Sales Shipments and Credits from exactly one year ago.

You may also use the Margin Enquiry's Cost column to identify a product's Current Cost of Goods Sold, but you must ensure all dispatched Sales Orders from the last 365 days have been completed for an accurate calculation.

Previous Year On Hand Quantity and Average Landed Cost

You can get a product's Stock On Hand Quantity and Average Landed Cost for this time last year using the Stock on Hand Enquiry. Filter the report by the required product, for this date on the previous year and make a note of the results in the Qty On Hand and Avg Cost fields.

Qty On Hand = Previous Year On Hand Quantity
Avg Cost = Previous Year Average Landed Cost

Current On Hand Quantity and Average Landed Cost

You can also get a product's current Stock On Hand Quantity and Average Landed Cost using the Stock on Hand Enquiry. Filter the report by the required product, for today's date and make a note of the results in the Qty On Hand and Avg Cost fields.

Qty On Hand = Current On Hand Quantity
Avg Cost = Current Average Landed Cost

You can also go to the Cost tab in a product's record to see the current Average Landed Cost.

Stock Turn Example

The product "JAM JAR" was added to the inventory earlier this year and started selling a couple of months ago. The Reorder Report returns a Stock Turn result of 6.3.

As the product did not have any Stock on Hand this time last year:

Previous Year On Hand Quantity = 0

Previous Year Average Landed Cost = 0

From the Stock On Hand Enquiry, filtered for today and for product "JAM JAR":

Current On Hand Quantity = 1.9167

Current Average Landed Cost = 53.83993321855272

Average Inventory Cost = (0 x 0) + (1.9167 x 53.83993321855272) / 2 = 51.5975

From the Transaction Enquiry, using the Date To filter for a year ago:

Total Value for Sales Shipments = -376.88

Total Value for Credits = 53.84

Current Cost Of Goods Sold = 376.88 - 53.84 = 323.0 (rounded to 1 decimal place)

🤓Tip: The Total Value calculated for Sales Shipments will show as a negative, but you want to use the positive version.