Inventory Turnover Ratio: What It Is, How It Works, and Formula
Sep 10, 2025 · Inventory turnover ratio measures how efficiently a company uses its inventory by dividing the cost of goods sold by the average inventory value during a set period.
How to Calculate Inventory Turnover: Formula & Examples
Jun 27, 2025 · To find your inventory turnover ratio, use this formula: Inventory turnover ratio = Cost of goods sold ÷ Average inventory. A higher ratio means your products sell quickly or …
Inventory Turnover - How to Calculate Inventory Turns
You can calculate the inventory turnover ratio by dividing the inventory days ratio by 365 and flipping the ratio. In this example, the inventory turnover ratio = 1 / (73/365) = 5.
Inventory turnover formula — AccountingTools
Nov 14, 2025 · Annual cost of goods sold ÷ Inventory = Inventory turnover. A more refined measurement is to exclude direct labor and overhead from the annual cost of goods sold in the …
Inventory Turnover Ratio Defined: Formula, Tips, & Examples
Jul 26, 2024 · The inventory turnover ratio is a measure of how many times the inventory is sold and replaced over a given period. Inventory Turnover Ratio = Cost of Goods Sold / Avg. …
What is Inventory Turnover and How to Calculate It? | Phase V
Dec 16, 2025 · In short, turnover data connects accounting, inventory management, and warehouse operations into one actionable insight. Here’s the simple calculation used across …
Inventory Turnover Ratio Defined: Formula, Calculator & Examples
Nov 13, 2024 · This calculator computes your inventory turnover ratio based on your beginning and ending inventory and cost of goods sold for the period.