Financial Implication Of Inventory Management Technique In Garment Business

The study concludes that inventory management plays an important role in the financial performance of garment businesses. The analysis of Skyline Apparels over the period 2020–21 to 2024–25 shows that inventory efficiency has fluctuated significantly. Although inventory turnover improved considerably in 2021–22, the subsequent decline and increase in Days Inventory Outstanding indicate the presence of slow-moving inventory and inefficient stock utilization. The continuous decline in GMROI indicates that inventory investment generated lower gross-margin returns in the later years. The high proportion of working capital invested in inventory also indicates pressure on liquidity and financial flexibility. However, the improvement in inventory turnover, reduction in DIO and increase in net profitability in 2024–25 indicate signs of recovery.

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