An Inventory analysis is the basically a process used by businesses which call for the understanding of the stock or the items pooled with the knowledge for the demand for the particular stock or items. It is the system to conclude the most favorable level of inventory for a business.
All business big or small calls for an inventory analysis because it is very important to check up and analyze your inventory from time to time. A good inventory analysis basically encapsulates what items you need the most, i.e., which ones are in demand, and when and in what quantity. Since the analysis of the inventory is worked out based on the demand for the product, that way, the business will know how much of the item or product to order in order to refrain from ordering extra.
Most business uses these techniques or formulas for determining the demand or analyzing the stock:
- Inventory turnover = cost of the goods sold ÷ by the average inventory
- Number of days sales in the inventory = inventory at the end of the accounting period ÷ daily cost of goods sold
However, if you use an inventory analysis template, the formulas and techniques will be given in the template which will help you calculate and analyze the inventory. Furthermore, the template will also have sections on other areas which require analysis such as the analysis of future inventory, forecasting future demand, inventory evaluation, analysis of the space for the inventory and other similar areas.
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Inventory Analysis Template
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