accounting inventory turnover ratio

accounting inventory turnover ratio is a key metric used by businesses to measure how quickly inventory is sold and replaced over a period of time. A high turnover ratio indicates that a company is selling inventory efficiently, while a low turnover ratio may suggest overstocking or slow sales. This ratio is calculated by dividing the cost of goods sold (COGS) by the average inventory value during the same period. Understanding the inventory turnover ratio helps businesses manage stock levels and improve profitability.