Question

Stock turnover rate

Answer 1

The stock turnover rate is a financial ratio that measures the number of times a company sells and replaces its inventory in a specific period. It can be calculated by dividing the cost of goods sold by the average inventory value. A high stock turnover rate indicates that a company is efficiently managing its inventory and generating revenue at a rapid pace. Conversely, a low stock turnover rate may indicate that a company is having trouble selling its inventory and may be carrying too much stock.