Materials
Inventory Turnover
A measure of how many times inventory is sold and replaced over a period.
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Updated 2025-10-01
Definition
High inventory turnover indicates efficient sales and inventory management, while low turnover may signal overstocking or slow-moving items.
Overview
Overview
Inventory turnover is a key metric for evaluating warehouse efficiency, cash flow, and product demand.
Formula
Inventory Turnover = Cost of Goods Sold / Average Inventory
Example
A retailer sells 12,000 units of a product in a year with an average inventory of 3,000 units, resulting in an inventory turnover of 4 times per year.
Tags
#Inventory Turnover#Metrics#Warehouse Management#Stock Efficiency#Materials
Related Terms
Inventory Aging
Cycle Counting
Perpetual Inventory System
