# Inventory turnover

*Last updated: 2026-06-22*

> Inventory turnover measures stock management efficiency by showing how many times a company's average inventory is fully cycled through in a given year.

Inventory turnover measures stock management efficiency by showing how many times a company's average inventory is fully cycled through in a given year. It is calculated by dividing the cost of goods sold by average inventory, with the result expressed as turns per year. A high turnover rate signals that capital tied up in stock is released quickly and warehouse space is used productively. Low turnover, by contrast, points to slow-moving or obsolete stock that inflates carrying costs and ties up working capital. Logistics managers use the metric to benchmark warehouse performance, identify stagnant SKUs, and optimise replenishment cycles. Optimal rates differ markedly by sector: perishable goods turn far more frequently than industrial equipment or spare parts with long lead times.

**Source:** [https://en.wikipedia.org/wiki/Inventory_turnover](https://en.wikipedia.org/wiki/Inventory_turnover)

## Quick Facts

| Property | Value |
|---|---|
| Term | Inventory turnover |
| Language | EN |
| Word count | 121 |
| Last updated | 2026-06-22 |
| Source | https://en.wikipedia.org/wiki/Inventory_turnover |

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