Inventory Turnover ratio or stock Turnover ratio indicates the number of times Inventory was sold or turned over during a period (generally a year).
Understanding this ratio becomes more relevant while analysing companies in the Manufacturing, FMCG or Retail sector.
Although the ratio is quite easy to calculate, it presents a greater insight into the company's efficiency in Inventory Management.
Check out the Inventory Turnover ratio interpretation to learn more about this ratio.
We have used the financials of US retail company Walmart Inc. This template can be used to calculate the ratio for any company.
How this Template will be helpful.
- This file already has the template for the Income Statement and the Balance Sheet.
- The main calculation sheet links the numerator and the denominator to the prospective balances to arrive at the final value.