what is a good inventory turnover rate

What is a good inventory turnover rate refers to a financial metric that measures how quickly a company sells and replaces its inventory over a certain period. A higher inventory turnover rate generally indicates that a company is selling products efficiently and that inventory is not sitting unsold for long periods. The ideal inventory turnover rate can vary by industry, but a higher turnover rate is usually considered favorable as it suggests good sales and inventory management. Businesses should aim for a balance, as both too high and too low of a turnover rate can indicate inefficiencies or stock shortages that could impact sales.