Also known as Inventory Turnover. It is an accounting measure of the number of times that the average stock on hand is sold and replaced during a given timeframe, usually a month or financial year. A low figure may indicate poor sales strategies, incorrect reading of market requirements, or over-stocking. Conversely, a high figure indicates the opposite and is a positive sign for the business. The equation to determine Stock Turnover is:
Cost of good sold ÷ by average stock = stock turnover
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