Inventory Turnover Ratio Formula Excel. Inventory turnover ratio formula helps you in finding a balance that is right for your business which will lead to making a profit in business. Inventory turnover ratio helps in measuring the efficiency of the company with respect to managing its inventory stock to generate sales and is calculated here we discuss the formula to calculate the inventory turnover ratio along with examples & excel templates.
Turnover Ratio Formula Laptrinhx from cdn.educba.com In a more simple sense, it shows how many times the stock of the company was sold during the year. The inventory turnover ratio is an efficiency ratio that shows how effectively inventory is managed by comparing cost of goods sold with average inventory for a period. It can be used to see if a business has an excessive inventory investment in comparison to its sales, which can indicate either unexpectedly low sales or poor inventory planning.
It measures how many times a the formula/equation is given below:
Inventory turnover ratio formula helps you in finding a balance that is right for your business which will lead to making a profit in business. You may also have a look at these. In accounting we call it inventory turnover rate or simple inventory turnover. If you don't have the time to run through the standard equation described above, this shortcut can give you an approximate value for your turnover.
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