Inventory Turns

Definition

Inventory turns refers to the number of times that inventory “turns over” in a year. It is calculated on the basis of the revenues associated with a product and the level of inventory held. [1]

Inventory Turns = Annual Product Revenues ($) / Average Inventory ($)

See Also

Inventory velocity

References

1. Farris, Paul W.; Neil T. Bendle; Phillip E. Pfeifer; and David J. Reibstein (2010). Marketing Metrics: The Definitive Guide to Measuring Marketing Performance (Second Edition). Upper Saddle River, New Jersey: Pearson Education, Inc.