Latest Free Templates

Thursday, April 28, 2011

Inventory Turnover Ratio Examples

Definition: Inventory Turnover Ratio (ITR, also known as Rate of Stock Turnover) is used to measure the rate in which the company is able to obtain cash from the sale of inventory. A high ratio will indicate an efficient management of inventory.

Formula:
Inventory Turnover Ratio = Cost of goods sold / Average inventory held
Or,
ITR = Cost of goods sold / Closing inventory
Or,
ITR = Net Sales /

0 comments:

Post a Comment