What do you mean by inventory turnover, Accounting Basics

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Q. What do you mean by Inventory turnover?

Inventory turnover -- a ratio which indicates amount of inventory a company uses tosupport a given level of sales. Formula is: Inventory Turnover = Cost of Sales ¸ AverageInventory. Numerous businesses have numerous general turnover levels. Ratio is significantin comparison with the ratio for previous periods or ratio for similar businesses.

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