Retail Glossary: Stock Turnover


The ratio of cost of goods sold over average stock (at cost). This indicates how many times, on average, the entire inventory (stock) was sold and replaced during the year. A high ratio may indicate positive factors such as good stock demand and management. A low ratio may indicate that either stock is naturally slow moving or problems such as the presence of obsolete stock.









Stock Turnover Ratio =


  Cost of Goods  
 Average Stock

Comments (2)

  1. The ratio of cost of goods sold over average stock (at cost). This indicates how many times, on average