Inventory turnover ratio: Difference between revisions

Revision as of 11:04, 2 February 2019

Inventory turnover ratio is an example of an activity ratio or management efficiency ratio.

The inventory turnover ratio indicates the number of times stock is completely replaced in a year.

It is calculated as:

Inventory turnover = cost of sales / inventory.

Revision as of 11:04, 2 February 2019 (view source) imported>Doug Williamson (Update links.) ← Older edit		Revision as of 11:04, 2 February 2019 (view source) imported>Doug Williamson (Expand first sentence.) Newer edit →
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	An example of an ''activity ratio'' or ''management efficiency ratio''.		Inventory turnover ratio is an example of an ''activity ratio'' or ''management efficiency ratio''.

	The inventory turnover ratio indicates the number of times stock is completely replaced in a year.		The inventory turnover ratio indicates the number of times stock is completely replaced in a year.