Financial Ratios
Inventory Turnover
Definition
What is Inventory Turnover?
Cost of goods soldDirect costs attributable to goods or services sold during a period. divided by average inventoryGoods held for sale, production, or consumption in the production process..
Example in practice
How This Looks in Practice
₦1.2 billion cost of sales on ₦200 million inventory gives six-times turnover.
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Related Terms
Financial Ratios
Gross Margin
Gross profit expressed as a percentage of revenue.
Financial RatiosOperating Margin
Operating profit expressed as a percentage of revenue.
Financial RatiosEBITDA Margin
EBITDA expressed as a percentage of revenue.
Equity ValuationEarnings Per Share
Net income attributable to ordinary shareholders divided by weighted average ordinary shares.