GlossaryEN1 min readUpdated: Jun 13, 2026

Inventory turnover ratio

Last updated: 13 June 2026Published: 19 June 2025

Source: https://en.wikipedia.org/wiki/Inventory_turnover

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Logistics Concept

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The inventory turnover ratio measures how many times a company's average stock is sold or dispatched within a given period, calculated by dividing total goods moved or sold by the average inventory held during the same timeframe. A ratio of 12 indicates that average stock turns over once a month. High values signal low capital tied up in warehousing and lean inventory management; low values point to excess stock that inflates storage costs and raises the risk of obsolescence or spoilage. In logistics, the ratio is used to benchmark warehouse performance and plan replenishment cycles. It is the inverse of days-on-hand (stock coverage), which expresses the same relationship as a time duration rather than a frequency.

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