Method #1 Inventory Turnover (TTM) Using COGS: The difference between the two is whether you use your total annual sales or the total cost of goods sold. There are two simple ways to calculate your restaurant’s inventory turnover rate. How to Calculate Your Restaurant Inventory Turnover Rate This insight can help you manage your inventory, food costs, and bottom line. ![]() It’s critical to calculate turnover because the food in your restaurant has a shelf life. Your restaurant ITR can help you measure the overall efficiency of your business. It’s crucial to look at the bigger picture when evaluating your turnover rate.Īre you holding on to too much inventory? How are your current sales? How much food do you throw out due to spoilage and over-stock? Why is it Important? It takes time to figure out what your ITR is trying to tell you about your business. A low ITR can represent an excess of inventory and low sales. Generally, a high ITR indicates efficient selling of inventory, and sales are steady. Many reasons can factor into whether you have a high or low turnover rate. It’s also known as inventory turns, stock turn, and or stock turnover. What is A Restaurant Inventory Turnover Rate?Ī restaurant’s inventory turnover rate (or ITR) is the number of times its inventory sells in a given period. This blog post will break down everything you need to know to understand your inventory turnover rate. It’s a tool you can use to measure more accurate purchase decisions, food waste, and profitability. Your inventory turnover rate is one of the most powerful things you can learn in the restaurant industry. Part of this is knowing how to calculate your restaurant inventory turnover rate. Understanding how to manage your restaurant’s inventory is vital to the success of your business. The lack of proper inventory makes your staff’s job harder, and it upsets customers. You know what we’re talking about, the nights where every single one of your preferred dishes is 86’d because of a missing ingredient. Most restaurant owners have at least experienced one if not many inventory nightmares. CAKE University Expert support at your fingertips.Contact us Let us help answer your questions.Our customers Helping customers worldwide. ![]()
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