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High vs low inventory turnover.
Both directions can be healthy or worrying. Cross-check fill rate, stockout count, and aged-stock dollars before drawing the conclusion.
High turnover reads two ways
| Reading | Confirming metric | Action |
|---|---|---|
| Lean operations | Fill rate > 97% | Hold; raise service-level target slightly |
| Stockouts | Fill rate < 95%, lost-sale units rising | Lift safety stock; widen reorder window |
Low turnover reads two ways
| Reading | Confirming metric | Action |
|---|---|---|
| Bloat | Aged-stock dollars > 20% of total inventory | Run the playbook from step 1 |
| Strategic depth | Top 100 SKUs cover >80% of revenue at 100% fill | Hold; size the tail by trip-defence value |
How investors read each direction
Public-equity analysts treat a turnover above the top quartile as positive without question if gross margin and revenue grow together. Private lenders treat the same number as a flag if revenue is flat: the inventory cut may be hiding a demand problem.