Inventory Turnover Ratio

Inventory Turnover Ratio

The inventory ratio is computed by dividing Cost of Goods Sold by Average Inventory.

This is the ratio that tells how many times in a given period of time you sold your inventory and had to buy more. If you replaced your inventory 6 times in a year, that means you sold it faster than someone who replaced theirs only three times in a year.

There is currently no content classified with this term.

Get instant access to step-by-step instructions on how to apply and sit for the CPA Exam.