Find how many times you sell through inventory per year. High turnover means healthy FMCG distribution — this also gives days on hand.
Inventory turnover tells you how many times a year you sell through and replace your stock: cost of goods sold ÷ average inventory. High turnover means capital isn't trapped in slow-moving goods — the hallmark of a healthy FMCG operation.
Divide 365 by the turnover and you get days on hand: how long, on average, a rupee of stock sits before it sells. Distributors typically run 8–12 turns a year; anything much lower signals dead stock tying up working capital.
COGS ₹12,00,000 against average inventory ₹2,00,000: turnover = 6× a year, or about 61 days on hand. For fast FMCG lines that's on the slow side — worth checking which SKUs are dragging.
FMCG distributors generally aim for 8–12 turns a year (30–45 days on hand). Staples turn faster, specialty lines slower. Compare each SKU against its category, not one blended number.
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