Report on warehouse liquidity ratio


One of the challenges of working with a warehouse is optimizing inventories so that reserves of liquid products are always optimal for the job and there is no overstock of non-liquid goods.

Optimal reserves are those that are sufficient for sales (allowing you to avoid missed sales) while not being overstocked (which means that operating capital is not lost on extra residues).

To calculate warehouse liquidity ratio, you can estimate the so-called “usage index” of an item, which is the relationship between the volumes of an item coming in to the volumes sold. This index is calculated for a specific period (by default: 1 year, but this varies by company).

In = (VSale — VPurch) / VSale where

VSale = Sales volume for the selected period,

VPurch = The purchase volume for the selected period.

The index can be interpreted as follows:

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An item will be highlighted separately if there are inventory residues but sales are nil for the period selected; this item is considered a “dead residue.”

At the same time, the total usage of a warehouse (or group) is considered as the sum of the weighted products included in the warehouse (or group) data, according to the cost value of the current balance of these goods.

In this case, if the solution allows you to give a monetary assessment for each category of goods, you can easily assess the amount of capital that has been invested inefficiently: inadequate investment in insufficiently provided items with active usage and excess investment in dead residues, illiquid items, and excessively provided goods.

This will allow you to quickly assess the state of warehouse liquidity ratio as a whole (according to its overall index), as well as to obtain the distribution of goods (with residues) according to the categories of liquidity. This will help to decide:

a) which products should be disposed of first — the dead residues and illiquidity

b) what products should not soon be bought and how much operating capital has been invested excessively in poorly used items. This will have been caused either by a buyer error or an incorrect sales plan.

c) what products should be purchased as a priority if not sufficiently available. Inadequate supply of these products can lead to missed sales. This will have been caused either by a buyer error or an incorrect sales plan.

d) setting your goal for optimizing the warehouse — key performance indicators (KPI) according to the calculated warehouse liquidity ratio for the group or the entire inventory. With the ability to track not only the final index, but also the problem items affected by actions taken by the person in charge of procurement or inventory.

The Mycroft Assistant presents this report in a way that is most convenient and accessible to the user. To select the report, click “Report liquidity of the warehouses” on the left in the report panel:

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The report form will open on the right:

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The form is divided into two sections: the upper part is the “Filter” and the lower part features details of the selected warehouse.


At the top in the filter, you need to select a company (legal person on whose behalf sales occur) and the prices to estimate the remainder: either the purchase prices, which are the prices specified in the documents of receipt, or the sales prices, which are specified in the transaction documents.

Below is a table with summary information of warehouses with residual supply of goods. The warehouse table includes the following columns:

Warehouse = the name of the warehouse

Usage index = the final consolidated warehouse utilization coefficient, calculated as a weighted sum of the coefficients of products with residual supply at the moment.

Items = the number of different products (range) that are in stock

% = the percentage this type of residue occupies in the total balance of stock on hand.

Cost = Sum estimate of the remainder of the goods of this type in the selected price type.

For a detailed display of records, the operator must click on a specific warehouse. The user can collapse a section filter by clicking “-” at top right in order to get more desktop space to work with detailed records.

Detailed records

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Detailed records are generated in the form of a table (or tree) of items with residues in a given warehouse.

The data is presented in the following columns:

Current residue — current balance of the selected stock

Cost — the current balance, expressed in selected prices (purchases / sales) at the selected warehouse

Sales — sales of goods from the selected warehouse to the selected company in a given period.

Purchases — volume of the item moved from the selected warehouse to a selected company in a given period.

Usage index — indicates the calculated value of the index used by the selected position in this warehouse, according to the sales of the selected company.

Indicator — a presentation of the usage index in text form according to the interpretations listed above.

If working with detailed records, the user is provided with a quick filter through which to select which items to display:

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“All” — displays all selected products warehouse, without filter

“Dead residue,” “Illiquid,” “Slightly used,” “Normally used,” “Actively used,” and “Deficit” are only items that relate to the corresponding type and belonging to the selected warehouse.

The user is given the choice of which products to display in a simple item tree:

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The item tree and goods grouped by item type (with the index of usage calculated for each):

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In this way, the user can evaluate the supply of one or another type of item (if grouped by item type).

It is possible to display by item properties (variations in the item parameters; for example — the color or size). Clicking the “Groups” button allows the user to choose to display information according to the calculated ABC groups:

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For example, it can answer the question “How many shortages do we have in our most important group (Group A)?” To answer this question, just select “Deficit” above, then click “Groups” below, and then view the results.

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Thus, you have a powerful tool in your hands that with just a few mouse clicks can categorize your current residues in the warehouse and determine how to invest funds in your company’s inventory most effectively.


Know more:

— Demand forecasting – information about it you can find HERE

— Sales analysis – information about it you can find HERE ;

— Planning – information about it you can find HERE and HERE ;

If you want to get started with the Mycroft Assistant – where we have implemented everything necessary for you to work effectively, simply sign up HERE and follow the provided instructions.