# How to Calculate the Turnover Rate of Finished Goods

Save

Calculate the average inventory of your business by finding the sum of your starting inventory and your total inventory at the end of every month for the period you are analyzing. For example, if you have a business that makes putty knives, the value of your inventory at the start of a three-month period is \$300, the value after the first month is \$330, for the second month it is \$300 and after the third month it is \$270. So, 300 + 330 + 300 + 270 = 1200.

Divide your answer by the number of months in the period for which you are calculating turnover rate plus one. For example, 1200/(3 + 1) = 300. Your average inventory during this period is \$300.

Calculate your sales during the period for which you are calculating the turnover rate of finished goods by finding the sum of your monthly sales. For example, your sales during the first month are \$660, for the second month, \$600, and during the third month, \$540. Thus, 660 + 600 + 540 = 1800.

Divide your answer by the average inventory you have calculated. For example, 1800/300 = 6.0. Your turnover rate of finished goods is 6.0.

## References

Promoted By Zergnet

## Related Searches

Check It Out

### Are You Really Getting A Deal From Discount Stores?

M
Is DIY in your DNA? Become part of our maker community.