Inventory Analysis Template

The analysis on inventory is conducted to understand the inventory well. The technique of inventory analysis enables the person to categorize the inventory in a better way. The distributors and retailers use the analysis technique to evaluate the management of the inventory.

The cost of each product available in the inventory is determined and then underperforming items in the inventory are identified.


Every business’s inventory is composed of expensive and cheap products. Both types of products are needed by a business. The analysis of the inventory makes the business owner know which product is cheap and requires fewer efforts as compared to the expensive one.

What is inventory analysis?

Inventory analysis is a powerful technique used by businesses to determine the most optimal and appropriate level at which the inventory can operate. The analysis contributes a lot to the decisions made by the owner of the inventory. Therefore, they have a major role to play in every business.

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 of the particular stock or items. It is the system to conclude the most favorable level of inventory for a business.

What is the purpose of inventory analysis?

In any business, assets are given much importance since they are the most valuable thing a business owns. It is the priority of every business to provide complete protection to assets. When the value of each product is determined through inventory analysis, a business can know which item needs more protection.

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.

What are the benefits of inventory analysis?

The key benefits are:

  1. It helps the business make a proper layout of the inventory warehouse
  2. It promotes the implementation of right authorization
  3. The inventory items that are currently inactive and not contributing to the business’s progress are managed more appropriately with the help of inventory analysis

Inventory analysis benefits:

The template for inventory analysis is a powerful tool which is being used these days very commonly. This template helps a user define the products quickly which are in accordance with the specifications of the business.

The inventory management becomes more efficient since the analysis tool is used before performing any management strategy. The template saves time also conducts the analysis like professional people and saves the time of the user.


Inventory analysis template

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Inventory Analysis Template

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