The Income|Outcome^® Contextuary

Inventory Turnover ratio: Cost of Sales (COS) divided by the average value of Inventory on hand.

Example: The Round Number Company Cost of Sales = 80; Inventory = 50 Inventory Turnover = 80/50 =1.6

This ratio is the number of times a business sells out its Inventory during the year.

Inventory Turnover us also called Inventory Turns.