Inventory turnover ratio

Financial ratio analysis.

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.

See also

• Activity ratio
• DIO
• Inventory
• Inventory days
• Inventory management
• Management efficiency ratio
• Turnover