What is the inventory forecast?

The inventory forecast projects where the capital tied up in stock is heading: the last 12 month-end inventory valuations, extended three months by a trend projection. It answers a planning question the current stock number can't — at the present rhythm of buying and selling, will inventory swell or run down over the next quarter?

Formula

inputs   = last 12 complete months of month-end inventory value
forecast = trend(inputs), projected 3 months, floored at zero

Worked example

Month-end inventory value drifts from €96,000 to €131,000 over a year while the revenue forecast is flat. The projection says €140,000+ by quarter's end. Nothing is "wrong" in any single month, but the two trends diverging means purchasing is outrunning sales — capital is quietly accumulating on shelves, and the dead-stock list says which products are absorbing it.

How Saldo Metrics computes it

v_inventory_value_monthly values each month's closing stock: the latest inventory snapshot per product and store within the month, multiplied by the product's best confirmed unit cost — the same cost source margin and dead-cash use, so all three agree on what a unit is worth. The widget takes the last 12 complete months of that series and projects three months ahead with the same four selectable methods as the revenue forecast (linear trend by default, moving averages, exponential smoothing), floored at zero. Uncosted stock carries unknown value, so months with poor cost coverage understate the series — the trend is only as complete as your confirmed costs.

Why it matters

Inventory is usually a store's largest capital position, and it moves slowly enough that a bad trend runs for months before it hurts. Reading the inventory trend against the revenue trend is the earliest overbuying signal available: inventory growing faster than sales precedes both the dead-stock pile-up and the cash squeeze.

Common mistakes

• Reading the level instead of the slope against revenue. €130k of stock is neither good nor bad; stock growing 30% while revenue grows 5% is the signal.
• Forecasting across a planned buying event. A deliberate pre-season stock-up breaks the trend by design; the projection doesn't know your purchasing calendar.
• Ignoring cost coverage shifts. Newly confirmed costs raise the valuation series without any physical stock change; check coverage before reading a jump as buying.

Where you see this in the app

The Inventory Forecast dashboard widget, with the projection method selectable per widget.