Q » What is the inventory turnover ratio?

Steven

06 Dec, 2025

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A » The inventory turnover ratio is a financial metric that measures how efficiently a company sells and replaces its inventory within a specific period. It is calculated by dividing the cost of goods sold by the average inventory during the period. A higher ratio indicates effective inventory management and sales performance, whereas a lower ratio may suggest overstocking or sluggish sales. This ratio is crucial for assessing operational efficiency and financial health.

Michael

06 Dec, 2025

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A »The inventory turnover ratio measures how often a company sells and replaces its inventory within a given period. It's calculated by dividing the cost of goods sold by the average inventory. For example, if a company has a cost of goods sold of $100,000 and an average inventory of $20,000, its inventory turnover ratio is 5, indicating it sells and replaces its inventory 5 times a year.

Ronald

06 Dec, 2025

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A »The inventory turnover ratio measures how efficiently a company manages its inventory by calculating how many times inventory is sold and replaced over a period. It is determined by dividing the cost of goods sold by the average inventory value. A higher ratio indicates effective inventory management, while a lower ratio suggests excess stock or inefficiencies. This metric helps businesses optimize stock levels and improve cash flow.

Edward

06 Dec, 2025

0 | 0

A »The inventory turnover ratio measures how often a company sells and replaces its inventory within a given period. It is calculated by dividing the cost of goods sold by the average inventory. A higher ratio indicates efficient inventory management, while a lower ratio may suggest overstocking or poor sales.

Charles

06 Dec, 2025

0 | 0

A »The inventory turnover ratio measures how efficiently a company sells and replaces its stock over a period. It's calculated as Cost of Goods Sold divided by Average Inventory. For example, if a company has a COGS of $500,000 and an average inventory of $100,000, the ratio is 5. This indicates the inventory is sold and replaced five times in the period, reflecting effective inventory management.

Anthony

06 Dec, 2025

0 | 0

A »The inventory turnover ratio measures how often a company sells and replaces its inventory within a given period. It's calculated by dividing the cost of goods sold by the average inventory. A higher ratio indicates efficient inventory management, while a lower ratio may suggest overstocking or poor sales.

Matthew

06 Dec, 2025

0 | 0

A »The inventory turnover ratio is a financial metric that measures how efficiently a company manages its inventory by calculating the number of times inventory is sold or used in a given period. It is determined by dividing the cost of goods sold by the average inventory level. A higher ratio suggests effective inventory management and sales performance, while a lower ratio may indicate overstocking or inefficiencies in sales processes.

Daniel

06 Dec, 2025

0 | 0

A »The inventory turnover ratio measures how often a company sells and replaces its inventory within a given period. It's calculated by dividing the cost of goods sold by the average inventory. For example, if a company has a cost of goods sold of $100,000 and an average inventory of $20,000, its inventory turnover ratio is 5, indicating it sells and replaces its inventory 5 times a year.

Christopher

06 Dec, 2025

0 | 0

A »The inventory turnover ratio measures how efficiently a company manages its inventory by calculating how many times inventory is sold and replaced over a period. It's determined by dividing the cost of goods sold by the average inventory. A higher ratio indicates effective inventory management, while a lower ratio may suggest overstocking or declining sales.

Joseph

06 Dec, 2025

0 | 0

A »The inventory turnover ratio measures how often a company sells and replaces its inventory within a given period. It's calculated by dividing the cost of goods sold by the average inventory. A higher ratio indicates efficient inventory management, while a lower ratio may suggest overstocking or poor sales. It helps businesses optimize inventory levels and improve cash flow.

William

06 Dec, 2025

0 | 0

A »The inventory turnover ratio measures how efficiently a company manages its inventory by calculating how often it sells and replaces stock over a period. It's computed as Cost of Goods Sold divided by Average Inventory. For instance, if a company has $500,000 in cost of goods sold and $100,000 in average inventory, its inventory turnover ratio is 5, indicating it sold and replenished inventory five times during that period.

James

06 Dec, 2025

0 | 0