inventory turns

inventory turns is a key performance metric used by businesses to measure how often inventory is sold and replaced within a given period, typically a year. The formula to calculate inventory turns is **Cost of Goods Sold (COGS) / Average Inventory**. A higher inventory turn rate generally indicates that a business is selling products quickly, which means the company is effectively managing its inventory. On the other hand, a lower turnover may indicate overstocking, weak sales, or inventory that is slow to move, which could lead to additional costs, such as storage fees. To improve inventory turns, businesses can focus on optimizing their inventory management practices, like forecasting demand accurately, reducing overstocking, or offering promotions on slow-moving items. Inventory turns are a useful tool for assessing the efficiency of inventory management and can help businesses identify areas where they can improve profitability by reducing waste or excess inventory.