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High inventory turnover can show that you're selling your goods quickly, which usually signifies that business is brisk at the time.
What is a inventory turnover?
The rate at which inventory stock is sold, used up, and replaced is known as inventory turnover. By dividing the cost of items by the average inventory for the same time period, the inventory turnover ratio is derived. The number of times inventory is sold or used over a given time frame, like a year, is referred to as the inventory turnover in accounting. It is calculated to determine whether a company has an excessive amount of inventory in relation to its level of sales. Inventory turnover quantifies how frequently a business changes its stock in relation to its cost of sales. In general, a higher ratio is preferable. A low inventory turnover ratio could indicate sluggish sales or overstocking (also known as surplus inventory).
Hence, High inventory turnover can show that you're selling your goods quickly, which usually signifies that business is brisk at the time.
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