Reading The Inventory Turnover



Next video:
Loading the player...

Inventory turnover is an efficiency ratio that shows how quickly a company uses up its supply of goods over a given time frame.

While inventory turnover is faster in some industries, such as grocery stores, than in others, such as department stores, comparatively low inventory turnover means that a company has poor sales or too much inventory.

Related Articles
  1. Fundamental Analysis

    Mark-To-Market Accounting

    "Mark-to-market" accounting is a way of valuing assets based on how much they could sell for under current market conditions. In recent decades, it has become the standard way to record financial ...
  2. Investing

    How To Decipher Accrual Accounting

    Accrual accounting is an important method of measuring the performance and position of a company. Learn more on how its used.
  3. Investing

    Receivables Turnover Ratio

    The receivables turnover ratio is a measure used to quantify a firm's effectiveness in extending credit as well as collecting debts. Learn more about it here.
  4. Investing

    Day Sales Outstanding

    Learn more about how day sales outstanding, or DSO, is calculated and used to measure the average number of days a company takes to collect revenue after sales.
  5. Investing

    Examining Costs Of Goods Sold (COGS)

    Learn more about the costs that go into production.
  6. Investing

    Cooking The Books

    To spot the signs of earnings manipulation, you need to know the different ways companies can inflate their figures.
  7. Mutual Funds & ETFs

    ETF Analysis: WisdomTree SmallCap Earnings

    Discover the WisdomTree Small Cap Earnings ETF, a fund with a special focus on small-cap and micro-cap stocks with positive earnings.
  8. Mutual Funds & ETFs

    ETF Analysis: iShares US Regional Banks

    Obtain information and analysis of the iShares US Regional Banks ETF for investors seeking particular exposure to regional bank stocks.
  9. Technical Indicators

    Key Financial Ratios to Analyze the Mining Industry

    Discover some the most important financial ratios used by investors and analysts to evaluate companies in the metals and mining industry.
  10. Technical Indicators

    Key Financial Ratios to Analyze Retail Banks

    Learn about key financial metrics that investors use to evaluate retail banks, and how the industry is fundamentally different from most other industries.

You May Also Like

Trading Center
×

You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!