Stock Management Calculator Explained:
(a) What is this? This calculator tells you: stock turn, week's cover and the average value of stock in the business.
(b) What does this tell me? This calculator gives a stock turn number (annual). It also tells you how many weeks cover you have - which tells you how many weeks of stock you have based on "normal" sales. Finally the average inventory number tells you how much money a business has invested in stock. Note that it is an average, not what is actually in the business at any one time.
(c) Why shouuld I use it? To help you manage your stock and the amount of money the business has invested in stock. Too much stock becomes expensive as you need to pay for it, and yet you won't have received the income for it. If the stock turn is too fast, you will have out of stocks, lost sales and lots of time spent re-stocking. The aim is to have the correct "balance" of stock.
(d) Caution: You need to make sure all the numbers entered are "cost" numbers, not "retail" numbers. None of these calculators tell you to increase or decrease stock levels. They simply tell you what the numbers are. Any decisions you make are at your risk.