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Inventory Turnover Ratio Formula

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Inventory Turnover Ratio measures the number of times your inventory "turned-over" during a time period. Check FAQs

ITR = \frac{COGS}{In}

ITR - Inventory Turnover Ratio?COGS - Cost of Goods Sold?In - Inventory?

Inventory Turnover Ratio Example

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With units

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Here is how the Inventory Turnover Ratio equation looks like with Values.

Here is how the Inventory Turnover Ratio equation looks like with Units.

Here is how the Inventory Turnover Ratio equation looks like.

0.8889 = \frac{40000}{45000}

0.8889 = \frac{40000}{45000}

0.8889 = \frac{40000}{45000}

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Inventory Turnover Ratio Solution

Follow our step by step solution on how to calculate Inventory Turnover Ratio?

FIRST Step Consider the formula

ITR = \frac{COGS}{In}

Next Step Substitute values of Variables

∴

ITR = \frac{40000}{45000}

Next Step Prepare to Evaluate

∴

ITR = \frac{40000}{45000}

Next Step Evaluate

∴

ITR = 0.888888888888889

LAST Step Rounding Answer

∴

ITR = 0.8889

Inventory Turnover Ratio Formula Elements

Variables

Inventory Turnover Ratio

Inventory Turnover Ratio measures the number of times your inventory "turned-over" during a time period.

Symbol: ITR

Measurement: NAUnit: Unitless

Note: Value should be greater than 0.

Formulas to find Inventory Turnover Ratio

Cost of Goods Sold

The Cost of Goods Sold is the direct costs attributable to the production of the goods sold by a company.

Symbol: COGS

Measurement: NAUnit: Unitless

Note: Value can be positive or negative.

Formulas to find Cost of Goods Sold

Inventory

Inventory is the goods and materials that a business holds for the ultimate goal of resale.

Symbol: In

Measurement: NAUnit: Unitless

Note: Value should be greater than 0.

Formulas to find Inventory

Other formulas in Operating and Turnover Ratios category

Go Free Cash Flow

FCF = CFO - CAPEX

Go Free Cash Flow to Firm

FCFF = CFO + (Int \cdot (1 - tax)) - CAPEX

Go Debt to Assets Ratio

DA = \frac{TL}{TA}

Go Debt to Equity Ratio

R D/E = \frac{TL}{TSE} \cdot 100

How to Evaluate Inventory Turnover Ratio?

Inventory Turnover Ratio evaluator uses Inventory Turnover Ratio = Cost of Goods Sold/Inventory to evaluate the Inventory Turnover Ratio, Inventory Turnover Ratio measures the number of times your inventory "turned-over" during a time period. Inventory Turnover Ratio is denoted by ITR symbol.

How to evaluate Inventory Turnover Ratio using this online evaluator? To use this online evaluator for Inventory Turnover Ratio, enter Cost of Goods Sold (COGS) & Inventory (In) and hit the calculate button.

FAQs on Inventory Turnover Ratio

What is the formula to find Inventory Turnover Ratio?

The formula of Inventory Turnover Ratio is expressed as Inventory Turnover Ratio = Cost of Goods Sold/Inventory. Here is an example- 0.888889 = 40000/45000.

How to calculate Inventory Turnover Ratio?

With Cost of Goods Sold (COGS) & Inventory (In) we can find Inventory Turnover Ratio using the formula - Inventory Turnover Ratio = Cost of Goods Sold/Inventory.

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Inventory Turnover Ratio Formula

Inventory Turnover Ratio Example

Inventory Turnover Ratio Solution

Inventory Turnover Ratio Formula Elements

Other formulas in Operating and Turnover Ratios category

How to Evaluate Inventory Turnover Ratio?

FAQs on Inventory Turnover Ratio

Variable Name