The Stock Turnover Ratio measures how frequently inventory is sold and replaced over a given period. It is calculated by dividing the cost of goods sold (COGS) by the average inventory value. A high turnover ratio indicates efficient inventory management, while a low ratio may suggest overstocking or slow-moving items. This metric is critical for evaluating cash flow and inventory health. Optimization tools track stock turnover across SKUs, product categories, and locations. They provide actionable insights to improve reorder strategies, reduce holding costs, and enhance overall inventory performance.
