Glossary · Finance
What is Inventory turnover?
Inventory turnover is cost of goods sold divided by average inventory, showing how many times stock is sold and replaced in a period.
Higher turnover means less cash tied up per dollar sold; too high can mean frequent stockouts. Compare with your own history and similar businesses, not a number from a different sector.
Formula
Inventory turnover = COGS ÷ average inventory at cost
Example
COGS $600,000 and average inventory $160,000 give 3.75 turns, about 97 days of inventory.
Calculate it
Shopify App · 3PL Partner API · US$39/mo entry plan
See Stokrio with your own data
Install Stokrio from Shopify and your products and orders flow in. Running a 3PL? Start with the demo.