Inventory turnover is the rate at which inventory is sold, used, or replaced. It can help you get an insight on products that are slow movers or basically unmovable, as well as giving you deeper insight on how well your products perform.
This means that a company can sell and replace its inventory of goods five times a year.
If your turnover rate is really high, it is a good thing since your products are selling and customers are flowing, that is if your business is profitable. On the other hand, it is possible that the product is undervalued and poses as too good of a deal to pass up, meaning you may want to assess your pricing structure. Also, it means you may be more prone to product shortages if any snags in the supply line occur.
Create Date: September 12, 2024
Last Modified Date: September 13, 2024
