Varastonkiertoaan

Varastonkiertoaan, often translated as inventory turnover, is a financial ratio that measures how many times a company's inventory is sold and replaced over a given period. It is calculated by dividing the cost of goods sold by the average inventory value. A higher inventory turnover generally indicates that a company is managing its inventory efficiently, selling products quickly, and incurring lower storage costs. Conversely, a low turnover might suggest slow-moving inventory, potential overstocking, or ineffective sales strategies.

The formula for inventory turnover is Cost of Goods Sold / Average Inventory. Average inventory is typically calculated by summing the inventory at the beginning of the period and the inventory at the end of the period and dividing by two. The period can be a quarter or a full year. Analyzing inventory turnover is crucial for businesses to optimize their supply chain, manage working capital, and identify areas for improvement in their sales and inventory management processes. Benchmarking this ratio against industry averages can provide valuable insights into a company's performance relative to its competitors. A very high turnover might, in some cases, suggest insufficient inventory levels, leading to lost sales opportunities.