average inventory turns

average inventory turns is a metric used by businesses to measure how often inventory is sold and replaced over a specific period, usually a year. A higher inventory turnover indicates that a company is selling its products quickly, while a lower turnover suggests slower sales and potentially overstocked inventory. To calculate average inventory turns, divide the cost of goods sold (COGS) by the average inventory for the period. This metric helps businesses assess the efficiency of their inventory management practices and optimize stock levels.