How to Calculate Inventory Turnover Days, and What Count Is Healthy

How long is inventory healthy to hold? No single number, but there is an algorithm and a judgment method to see if your cash is frozen in stock.

1. The algorithm

Inventory turnover days is approximately average inventory value divided by daily COGS. E.g., average stock of 30k, daily sales of 1k - about 30 days turnover.

2. Healthy line by category

Fast-moving and light-small items turn fast (weeks to a month); heavy goods and high AOV can be a bit longer. The key is whether it is faster than last month or slowing.

3. Speed up with the pre-positioned warehouse

The pre-positioned warehouse's small-batch, high-frequency replenishment turns faster than one big stockpile. Youmanman's real-time inventory reports show each SKU's turnover directly.

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