Financial Glossary

Inventory Turnover

Definition

Inventory turnover is the number of times a company's inventory is sold and replaced over a period, indicating the efficiency of inventory management.

Related Services

Supply chain management, logistics, and inventory optimization services help businesses improve inventory turnover by streamlining processes and reducing excess stock.

Problem and Application

Low inventory turnover may indicate overstocking, while high turnover could signal inadequate stock levels. Proper inventory management ensures efficiency and profitability.

Conclusion

Monitoring inventory turnover is essential for maintaining operational efficiency and ensuring that capital is not tied up in unsold goods.