Inventory turnover is a financial ratio showing how many times a company turned over its inventory relative to its cost of goods sold in a given period. A company can then divide the days in the period, typically a fiscal year, by the inventory turnover ratio to calculate how many days it takes to sell its inventory, on average. The inventory turnover ratio can help businesses make better decisions on pricing, manufacturing, marketing, and purchasing. It is one of the efficiency ratios measuring how effectively a company uses its assets. Inventory turnover measures how efficiently a company uses its inventory by dividing the cost of goods sold by the average inventory value during the period. Inventory turnover ratios are only useful for comparing similar companies and are particularly important for retailers.Become a supporter of this podcast: https://www.spreaker.com/podcast/investment-terms--4432332/support.

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