inventory turnover

= stock turnover
A ratio that measures the number of times items of stock are used annually. To obtain an accurate measure of stock turnover the following formula is used for each commodity:
number of units used per annum/number of units in stock.
The number of units in stock may be taken at the start or the end of the year or may be the average of both. Because the information required for this ratio is only likely to be available from the internal management accounts, a different formula using final accounts figures is often used as an overall measure of inventory turnover (see rate of turnover).

Accounting dictionary. 2014.

Look at other dictionaries:

  • Inventory turnover — The Inventory Turnover is an equation that equals the cost of goods sold divided by the average inventory. Average inventory equals beginning inventory plus ending inventory divided by 2. Inventory Turnover EquationThe formula for inventory… …   Wikipedia

  • Inventory turnover — The ratio of annual sales to average inventory which measures the speed that inventory is produced and sold. Low turnover is an unhealthy sign, indicating excess stocks and/or poor sales. The New York Times Financial Glossary * * * inventory… …   Financial and business terms

  • inventory turnover — The ratio of annual sales to average inventory, which measures the speed at which inventory is produced and sold. Low turnover is an unhealthy sign, indicating excess stocks and/or poor sales. Bloomberg Financial Dictionary * * * inventory… …   Financial and business terms

  • Inventory Turnover — A ratio showing how many times a company s inventory is sold and replaced over a period. the The days in the period can then be divided by the inventory turnover formula to calculate the days it takes to sell the inventory on hand or inventory… …   Investment dictionary

  • inventory turnover — Fin an accounting ratio of the number of times inventory is replaced during a given period. The ratio is calculated by dividing net sales by average inventory over a given period. Values are expressed as times per period, most often a year, and a …   The ultimate business dictionary

  • inventory turnover — period of time in which the inventory of a business is completely used up and restocked …   English contemporary dictionary

  • inventory turnover — /ˌɪnvənt(ə)ri tɜ:nəυvə/ noun especially US the total value of stock sold during a year, divided by the value of the goods remaining in stock …   Dictionary of banking and finance

  • Inventory turnover ratio — is one of the Accounting Liquidity ratios, a financial ratio. This ratio measures the number of times, on average, the inventory is sold during the period. Its purpose is to measure the liquidity of the inventory. A popular variant of the… …   Wikipedia

  • inventory turnover ratio — (Accounting) index of the inventory held by a company in contrast with the sales (used to assess the effectivity of holding inventory) …   English contemporary dictionary

  • Оборачиваемость запасов (INVENTORY TURNOVER)  — Отношение, показывающее, сколько раз был продан (использован для производства) средний объем запасов в течение года. Рассчитывается делением себестоимости реализации на среднюю стоимость запасов. Средний объем запасов может определяться как… …   Словарь терминов по управленческому учету

Share the article and excerpts

Direct link
Do a right-click on the link above
and select “Copy Link”

We are using cookies for the best presentation of our site. Continuing to use this site, you agree with this.