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Abstract
Inventory is one of the most valued assets in any organization be it construction, manufacturing, retails or inventory-intensive sectors. It is equally important for business of any size. Excess or shortages of inventory can prove detrimental to the business. It is defined as the process of receiving, storing and consumption of stock. These include the management of raw materials, materials in process, spare parts / components, and finished products as well as warehousing and processing such items. Hence it becomes very essential to track and manage inventory for the business to improve upon the cash flows and profitability. Key Performance Indicators (KPI) are defined for inventory management as a quantitative measure to track and measures the performance in inventory function. The research paper aims to study few of the critical KPIs using financial ratios as a metrics to evaluate and track the performance. The research paper will take a closer look, what are the indicators of performance which can be viewed from the financial statements, which will help the organization to make better decision that will positively impact the business. Keywords