Description: Inventory turnover is a crucial metric in business that measures how many times inventory is sold and replaced over a specific period. This indicator is fundamental for the efficient management of resources, as it allows companies to assess the effectiveness of their sales strategies and product demand. A high inventory turnover suggests that products are selling quickly, which may indicate good market acceptance and proper stock management. Conversely, a low turnover may signal issues such as excess inventory, product obsolescence, or ineffective marketing strategies. Inventory turnover is calculated by dividing the cost of goods sold (COGS) by the average inventory during a specific period. This analysis not only helps optimize working capital but also enables companies to make informed decisions about restocking, promotions, and phasing out non-selling products. In a competitive environment, where market conditions change rapidly, maintaining a healthy inventory turnover is essential for maximizing profits and minimizing losses. Additionally, proper inventory turnover management can enhance customer experience by ensuring that desired products are available and up-to-date.
