Formula to calculate inventory
turnover ratio:
Inventory Turnover Ratio = cost of
goods sold / average inventory.
Inventory
turnover ratio definition and explanation:
The
inventory turnover ratio measures the number of times a
company sells its inventory during the year.
A high
inventory turnover ratio indicated that the product is
selling well.
The
inventory turnover ratio should be done by inventory
categories or by individual product.
The inventory turnover ratio is included in the financial
statement ratio analysis spreadsheets highlighted in the
left column, which provide formulas, definitions,
calculation, charts and explanations of each ratio.
The inventory turnover ratio is listed in our turnover
ratios.
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Spreadsheets to
calculate ratios (includes formulas, definitions,
explanations and charts):
See list
of ratios , or the financial statement ratio
analysis spreadsheets which are not highlighted in the
left column, to see which other ratios our spreadsheets
calculate, define and explain.
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turnover ratio is included in our
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