Inventory Turnover Ratio: How It Impacts Business Success & Efficiency
RNC
MARCH 16, 2025
The inventory turnover ratio is a key metric that determines how efficiently a company sells and replenishes its stock over a given period. A high stock turnover indicates strong sales and effective inventory control, while a low ratio may suggest overstocking, poor demand forecasting, or slow-moving products. Businesses that track and optimize this ratio can enhance cash flow, reduce storage costs, and improve overall profitability.
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