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Retail stock health

How much cash is trapped in stock that won't sell?

Slow retail stock is just cash sitting on a shelf gathering dust. This works out how fast your stock turns over and how much money you've got tied up beyond what you actually need.

The numbers you enter

$
What the stock you sold over a year cost you to buy — not the sell price.
$
What your current shelf stock cost you to buy.
$
What that same shelf stock would bring in if it all sold.
$
Typical week of product sales at the price you charge.
4–6 is a healthy salon target. Higher means stock moves faster.

What the numbers mean

Cash tied up in excess stock
$2,500
You're holding about 18 weeks of stock and turning it 2.9× times a year — trim back toward your target and you free up $2,500.
Stock turns per year
2.9×
How many times your shelf stock sells through in a year.
Weeks of stock
18
How long your current stock would last at this sell rate.
Speed of sale
7.5%
Share of your shelf sold each week — aim for around 10%.
Stock you'd hold at target
$6,500
Cost-value of stock that hits your target turn.
Where it goes
Stock on hand (at cost)$9,000
Ideal stock at target turn$6,500
Excess cash tied up$2,500

How this is worked out

Stock turns = annual cost of goods sold ÷ stock on hand at cost. Weeks of stock = 52 ÷ turns. Speed of sale = weekly sales ÷ stock at sell price (sell price both sides, so GST cancels out). Ideal stock = annual COGS ÷ your target turn; excess cash = anything you're holding above that (never below zero). All figures ex GST and at cost unless noted — keep cost and sell values consistent or the turns figure won't make sense. RAG bands are general retail rules of thumb, not a rule for your salon; a destination retail business may sit higher on purpose. This is a planning guide, not accounting or tax advice.

A working tool, not financial advice. It uses the figures and assumptions you enter — check them against your own numbers and your accountant before any pricing, wage or financial decision. Award and tax figures change (often each 1 July); verify current rates at fairwork.gov.au and ato.gov.au. Shear Profit gives no tax or financial advice.

Want this across your whole business — properly? Run your free Profit Snapshot and we'll show you exactly where the money's going. Matt Grumley, in your corner.

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