![]() ![]() Inventory Turnover Ratio = Cost of Goods Sold (COGS) / Average InventoryĪverage inventory used in the above formula is calculated using the following formula:Īverage Inventory Formula = (beginning inventory + ending inventory) / 2 What does the inventory turnover ratio measure The inventory turnover ratio is calculated by taking a company’s cost of goods sold (often referred to as cost of sales) during a period and dividing that amount by the average inventory during that period. With the inventory turnover ratio calculator, a good understanding of the ratio, and your brainpower, you'll have everything you need to effectively and efficiently analyze how a company is managing its inventory. Summarize a quick overview of our 5 step process for analyzing inventory turns.Provide an example to further enhance your understanding of the ratio, and.How the inventory ratio is calculated and what it measures,.We’ll cover a few main points, including: In this article we’ll dive into the important details that will help you calculate and use the inventory turnover ratio to enhance your financial analysis. Our inventory turnover calculator is a useful tool to help you calculate a company's inventory turns more quickly, but it takes more than just the calculator to use it effectively during your financial analysis. Quick Guide: The Inventory Turnover Ratio ![]()
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