Inventory Turnover
Definition
A ratio measuring how many times a company sells and replaces its inventory during a period. Higher turnover generally indicates stronger sales and efficient inventory management.
Formula / Rules
Cost of Goods Sold / Average Inventory
Example
$800,000 COGS and $200,000 average inventory equals 4.0 inventory turnover.
Related Terms
Frequently Asked Question
What is Inventory Turnover?
Inventory Turnover measures how many times a company sells and replaces inventory in a period. A higher ratio indicates efficient inventory management and strong product demand.
APA Citation
Last updated:
· Source: VixShield Trading Glossary — From SPX Mastery by Russell Clark
⚠️ Not financial advice. This definition is educational content from the SPX Mastery book series by Russell Clark (VixShield). Past performance is not indicative of future results. Trading options involves substantial risk of loss and is not appropriate for all investors. Always paper trade before risking real capital.