Inventory Velocity


Inventory velocity or inventory turnover is the time period starting with receipt of raw materials or purchased inventory and ending with the sale of the finished goods to the customer (the period over which a business has ownership of inventory).

It is measured by dividing the cost of goods sold by the average inventory on hand.[1]

Inventory turnover = Cost of goods sold ($) / Average inventory on hand ($)


  1. ^ Accounting Tools. What is Inventory Velocity?

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