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Finance
Inventory turnover
Inventory turnover shows how often average inventory is sold and replaced during a period.
Also known as
Stock turn
Direct answer
What is Inventory turnover?
Inventory turnover shows how often average inventory is sold and replaced during a period. Low turnover can signal overstock or slow assortment. Extremely high turnover may indicate insufficient buffers and stockout risk.
Formula
Inventory turnover = cost of goods sold ÷ average inventory
Practical example
With 2.4 million euros cost of goods sold and 600,000 euros average inventory, turnover equals 4.
What teams should remember
Inventory turnover shows how often average inventory is sold and replaced during a period.
Low turnover can signal overstock or slow assortment. Extremely high turnover may indicate insufficient buffers and stockout risk.