Q » What is the inventory turnover ratio?

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. A higher ratio indicates efficient inventory management, while a lower ratio may suggest overstocking or slow sales.

David

06 Dec, 2025

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