whats inventory turnover

whats inventory turnover Inventory turnover is a key metric that measures how often a company sells and replaces its inventory during a specific period, usually a year. The formula to calculate inventory turnover is: Inventory Turnover = Cost of Goods Sold / Average Inventory. A higher inventory turnover ratio indicates that a company is selling products quickly, which is typically seen as a positive sign for profitability. On the other hand, a low turnover rate may signal overstocking or weak sales performance.