Financial Statement Analysis Magazine Section

Ratio - Inventory Turnover Ratio

Inventory Turnover RatioINVENTORY TURNOVER RATIO:                                                                           onlinecalculator iconOnline Inventory Turnover Ratio Calculator

This ratio is obtained by dividing the 'Total Sales' of a company by its 'Total Inventory'. The ratio is regarded as a test of Efficiency and indicates the rapiditity with which the company is able to move its merchandise.

The formula:

Inventory Turnover Ratio = Net Sales / Inventory

The formula:

This ratio can also be calculated as:

Inventory Turnover Ratio = Cost of Goods Sold / Inventory uses cookies to improve your online experience. These cookies are necessary for the website to function and cannot be switched off in our systems. Without this type of technology, our services will not work optimally or won't be able to provide certain features and functionalities. To find out more about our policy please click "More information". If you do not agree click "Decline". By clicking "Accept" below, you will be giving your consent to our cookie policy.
More information Accept Decline