Inventory turnover benchmarking tool | BDC.ca
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Inventory turnover

Measures the number of times inventory has been turned over (sold and replaced) during the year. It is a good indicator of inventory quality (whether the inventory is obsolete or not), efficient buying practices, and inventory management. This ratio is important because gross profit is earned each time inventory is turned over.

Calculation:

cost of goods sold

average inventory

Step 1: Choose your industry sector








Step 2: Calculate your inventory turnover
Cost of goods sold  
Average inventory during the year  

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