Inventory Turnover
Number
This KPI measures how often an organization's inventory is sold and replaced over a given period. A high turnover indicates efficient inventory management and sales processes, while a low turnover might mean poor sales or excessive inventory.
Formula
Cost of Goods Sold / Average Inventory
Example
If the cost of goods sold is $1,000,000 and average inventory is $200,000, the inventory turnover is 5 times.