what is an inventory turn

what is an inventory turn refers to the number of times a company’s inventory is sold and replaced over a given period, usually a year. It is an important metric for evaluating how efficiently a business manages its inventory. The formula for calculating inventory turnover is: Inventory Turnover = Cost of Goods Sold (COGS) / Average Inventory. A high turnover rate suggests efficient inventory management, while a low turnover rate could indicate overstocking or slow-moving products.