Work out stock cover days instantly with clear inputs, formula shown and shareable results.
Stock cover converts an inventory balance into time: how many days of trading the current stockholding supports at the recent rate of sale. Buyers plan replenishment in weeks of cover, while finance watches the same figure as days of inventory outstanding.
Stock cover
Cover days = Closing stock / (Annual COGS / Days in period)
Stock turns
Turns = Days in period / Cover days
Use cost on both sides. Mixing retail stock value with cost of sales overstates cover by the whole gross margin.
Only up to a point. Cover buys service level but ties up cash and raises obsolescence risk, so target it per category rather than for the whole business.