Inventory turnover means number of times inventory is sold over the period. It shows how well is company turning its inventory into sales.
Formula:
Inventory turnover = (A) Cost of goods sold / (B) Average inventory
Average inventory = (last periods inventory + current inventory)/ 2
Disclaimer
The information provided on Accounting Portal is for general informational and educational purposes only and does not constitute professional accounting, tax, financial, or legal advice.
While we strive for accuracy and timeliness, no representation or warranty is made regarding completeness or reliability. Always consult a qualified professional before making any business, tax, or financial decisions.
Neither Accounting Portal nor its authors are liable for any loss or damage resulting from the use of this information.
© 2025 Accounting Portal. All rights reserved.