04.07.2022 - 04:20

What is turnover ratio?

Question:

What is turnover ratio?

Answers (1)
  • Beatrice
    April 9, 2023 в 09:27
    Turnover ratio is a financial metric that measures the efficiency and effectiveness of a business in managing its inventory. It is calculated as the ratio of cost of goods sold to the average inventory during a specific period of time. The higher the turnover ratio, the more often the inventory is sold and restocked, which indicates that the business is managing its inventory well and generating sufficient revenue. On the other hand, a low turnover ratio implies that the business is holding onto inventory for too long, which may lead to higher storage costs and reduced profitability.
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