inventory turnover

inventory turnover definition - finance
A financial calculation that shows how quickly a companyÂ’s inventory is being turned over. A high inventory turnover is an indicator of businessÂ’s health. Inventory turnover is calculated by dividing annual sales, or the cost of goods sold, by the average inventory for the year. The resulting number is the number of times that the inventory turned over.

Webster's New World Finance and Investment Dictionary Copyright © 2003 by Wiley Publishing, Inc., Indianapolis, Indiana.
Used by arrangement with John Wiley & Sons, Inc.

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