Inventory Turns

How To Calculate Food Inventory Turns

Inventory Turns is the number of times your inventory turns during a given period (month, year, whatever you choose).  Typically, the higher the turns the better because it indicates that product is purchased and used regularly and is not sitting on the shelves.  Typical industry standards for Inventory Turns in restaurants is 4 - 8 turns a month.  The higher the ratio of fresh product to frozen/dry product you use the higher the number should be. 

Inventory Turn Formula

The formula to calculate inventory turns is:
inventory used ÷ average inventory

First, calculate average inventory for the period.  If you take a monthly inventory, this is the formula to calculate average inventory for the month: 
beginning inventory + ending inventory ÷ 2

Next, calculate inventory used:
= beginning inventory + purchases - ending inventory

Lastly, calculate inventory turns:
inventory used ÷ average inventory

Beginning Inventory	$3490
Purchases	$22,873
Sub-Total	$26,363	BI+P
Ending Inventory	$6129
Inventory Used	$20,234	ST-EI
Sales	$68,548
FC %	29.52%	IU÷S
Last FC %	28.64%
+/- %	+ .88%

  

 

  Average Inventory = $4809.50  ($3490 + $6129) ÷ 2

  Inventory Turns =  4.21  ($20,234 + $4809.50)

  Inventory Change = +$2639 or +176%