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Inventory turnover ratio interpretation

MPR Sanjay Kumar (166 Points)

18 October 2021  
my honourable persons could you please tell me what is mean by inventory turnover ratio then how to calculate the inventory turnover ratio why the companies are using the inventory turnover ratio

 12 Replies

yasaswi gomes (My grammar is 💯 good I)   (6646 Points)
Replied 18 October 2021

Inventory/material cost of sales or revenue = days. It tells us, how efficiently material was purchased, converted and sold. The lower the number of days, the better

1 Like

MPR Sanjay Kumar (166 Points)
Replied 18 October 2021

My dear sir ,I need deep interpretation clear

yasaswi gomes (My grammar is 💯 good I)   (6646 Points)
Replied 18 October 2021

Inventory turnover ratio gives the number of days it took the owner to buy, manufacture and sell. It shows how many times owner purchased and sold inventory. Lots of other versions online google

1 Like

MPR Sanjay Kumar (166 Points)
Replied 18 October 2021

Oh ok sir 👍 thank you very much my honourable sir............very useful...........forumala of inventory turnover ratio??

yasaswi gomes (My grammar is 💯 good I)   (6646 Points)
Replied 18 October 2021

Better than google, read working capital chapter in your finance text books, good explanation will be given

2 Like

MPR Sanjay Kumar (166 Points)
Replied 18 October 2021

Thank you 😊 sir 👍👍👍😊

Sourav (Student) (23912 Points)
Replied 18 October 2021

Agree with yasaswi
1 Like

Rama chary Rachakonda (Master in Accounts & Lawyer email ID:ramachary64@gmail.com voice no:9989324294)   (2913 Points)
Replied 18 October 2021

Working capital is used to fund operations and meet short-term obligations. If a company has enough working capital, it can continue to pay its employees and suppliers and meet other obligations, such as interest payments and taxes, even if it runs into cash flow challenges. so working capital analysis is a heart of the management of a company

2 Like

vasamsetty ramaiah (chartered accountant) (31 Points)
Replied 23 October 2021

The number of times the inventory rotates or cycle during the year

vasamsetty ramaiah (chartered accountant) (31 Points)
Replied 23 October 2021

The number of times the inventory rotates or cycle during the year

vasamsetty ramaiah (chartered accountant) (31 Points)
Replied 23 October 2021

The number of times the inventory rotates or cycle during the year

vasamsetty ramaiah (chartered accountant) (31 Points)
Replied 23 October 2021

The number of times the inventory rotates or cycle during the year


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