Financial management
This query is : Resolved
14 April 2010
Higher inventory turnover is most beneficial or lower is better. Ex: Company A has ITR=10 Company B has ITR=12 which company is better.
14 April 2010
Stock Turnover Ratio = Cost of Goods Sold/Average Stock
ITR-A= 10 times
ITR-B = 12 times
Analysis:- Stock turnover ratio shows that every rupee invested in stock has been used to achieve more sales. A firm with high ratio can sell even at a low margin.A higher ratio indicates that the firm is making higher sales and that it’s storage cost is low.
ITR-A= 10 times
ITR-B = 12 times
Analysis:- Stock turnover ratio shows that every rupee invested in stock has been used to achieve more sales. A firm with high ratio can sell even at a low margin.A higher ratio indicates that the firm is making higher sales and that it’s storage cost is low.
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