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Inventory Turnover

This topic has 3 replies, 2 voices, and was last updated 5 years ago by John Moffat.

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November 7, 2020 at 4:18 pm #594374
ilham9089
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Sir what is Inventory Turnover? I saw a few questions related to it in the exam kit but there is no mention of it in the lectures or notes
November 8, 2020 at 10:03 am #594406
John Moffat
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Cost of sales divided by the inventory.
November 8, 2020 at 2:33 pm #594441
ilham9089
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Yes, but what does it mean?
November 8, 2020 at 2:59 pm #594450
John Moffat
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A higher figure for the inventory turnover means that the inventory days are lower. Provided that they carry enough inventory to operate the business then the lower the inventory days (and therefore the greater the inventory turnover) the better.
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