Inventory turnover ratio is a ratio that measures how many times a company sells and replaces its inventory during a given period. It helps to evaluate how efficiently a company is managing its inventory and its cost of goods sold1. The formula for inventory turnover ratio is:
Inventory turnover ratio = Cost of goods sold / Average inventory
Where:
- Cost of goods sold is either TM013,
ttm_cogs
- Average inventory is the average of the beginning balance and ending balance of BS009,
bs_inventories