Inventory turnover: the metric that ties up your capital

13 October 2026, 4 min read, Weebuild Technology Consulting

Inventory turnover is one of the most important metrics for a retail or food business. It shows how efficiently stock is used and how much working capital is tied up.

How to calculate it

Inventory turnover = cost of goods sold during the year ÷ average inventory value. If you sell goods worth SEK 6 million at purchase price and hold an average inventory of SEK 1.5 million, turnover is 4. The stock is sold four times a year on average, and each item sits for roughly three months.

Why it matters

Every krona in stock is a krona that can’t be used for anything else. Slow turnover also brings the risk of obsolescence, waste and expired dates, which is especially costly for food.

Where the problems usually are

• Purchases are made on gut feeling or habit
• Slow-moving items are spotted too late
• Seasonal variation doesn’t show in the data
• The data exists, but in systems that don’t talk to each other

How data and AI help

An inventory and purchasing agent can follow sales and stock levels continuously, flag items that move too slowly and propose what to order and when. People still make the decisions, but on a better basis. That is exactly what we did for Tanara Co AB.