Used
Vehicle Inventory Turn
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Formula:
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Step
One
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Cost
of Sales (Most recent month)
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=
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$
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divided
by:
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/
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Used
Vehicle Inventory Dollars - End of Month
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=
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$
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Equals DOLLAR TURN OF INVENTORY
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=
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#
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Step
Two
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#
of Dollar Turns (from Step One)
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=
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x
12 Months
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x
12
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Equals ANNUALIZED DOLLAR TURN
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=
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#
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Step
Three
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Annual
Period
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=
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365
Days
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divided
by:
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/
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Annualized
Dollar Turn (from Step Two)
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=
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#
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Equals # OF DAYS TO TURN INVENTORY
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=
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#
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GOAL
FOR PROFITABILITY:
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|
45
DAY INVENTORY TURN
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EIGHT
INVENTORY TURNS PER YEAR
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Used
Vehicle Inventory Turn
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Example
Calculation
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Formula:
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Step
One
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Cost
of Sales (Most recent month)
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=
|
$ 176,800
|
divided
by:
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|
/
|
Used
Vehicle Inventory Dollars - End of Month
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=
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$ 324,600
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Equals DOLLAR TURN OF INVENTORY
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=
|
0.54
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Step
Two
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#
of Dollar Turns (from Step One)
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=
|
0.54
|
x
12 Months
|
|
x
12
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Equals ANNUALIZED DOLLAR TURN
|
=
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6.5
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Step
Three
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Annual
Period
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=
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365
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divided
by:
|
|
/
|
Annualized
Dollar Turn (from Step Two)
|
=
|
6.5
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|
Equals # OF DAYS TO TURN INVENTORY
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=
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56
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GOAL
FOR PROFITABILITY:
|
|
45
DAY INVENTORY TURN
|
|
EIGHT
INVENTORY TURNS PER YEAR
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