inventory turnover

USAGE SUMMARY

The phrase "inventory turnover" is correct and usable in written English. You can use it when discussing the efficiency of inventory management in a business context. For example, "The company's inventory turnover ratio improved significantly last quarter." Alternative expressions include "stock turnover" and "inventory turnover ratio."

✓ Grammatically correct

Formal & Business

News & Media

Academia

Human-verified examples from authoritative sources

Exact Expressions

60 human-written examples

5. Calculate Intel's 2002 Inventory Turnover ratio.

Massachusetts Institute of Technology

The result was consistently strong inventory turnover and profitability.

Massachusetts Institute of Technology

Jay: The question is, what kind of inventory turnover do you expect?

The New York Times

Another important indicator is inventory turnover, which shows how frequently the overall stock of goods moves from warehouse to customer.

The New York Times

Management has renewed its focus on improving inventory turnover, Mr. Antonelli said, and is improving free cash flow.

The New York Times

The principal method of improved inventory productivity, he said, is through stepped‐up rates of inventory turnover.

The New York Times

There is no point in designing a large display that will not generate the retailer's required level of inventory turnover.

Harvard Business Review

Or, if you fill the store, your inventory turnover might be slower, which could cause a problem with stale merchandise.

The New York Times

Inventory turnover?

Forbes

He has speeded inventory turnover.

Forbes

A&P's inventory turnover is just eight.

Forbes

Expert writing Tips

Best practice

When discussing financial performance, use "inventory turnover" to highlight how efficiently a company is managing its stock levels. A higher turnover generally indicates better sales and less capital tied up in inventory.

Common error

Avoid assuming that a high "inventory turnover" automatically equates to higher profits. While efficient inventory management is beneficial, factors like low profit margins or high operating costs can offset the advantages of rapid turnover.

Linguistic Context

The phrase "inventory turnover" functions as a noun phrase, typically used as a subject or object in sentences related to business and financial analysis. Ludwig shows that it indicates a rate or measure of how quickly inventory is sold and replaced.

Expression frequency: Very common

Frequent in

Formal & Business

35%

News & Media

33%

Academia

17%

Less common in

Science

10%

Wiki

3%

Reference

2%

Ludwig's WRAP-UP

In summary, "inventory turnover" is a frequently used noun phrase in business and finance, indicating the efficiency of inventory management. Ludwig confirms its grammatical correctness and demonstrates its usage across diverse contexts, including formal business reports, news articles, and academic discussions. While primarily professional, it is important to note that a high "inventory turnover" does not automatically mean higher profits as margins and operating costs are equally important. Alternatives include "stock rotation" or "inventory velocity". Therefore, understanding its calculation and implications is crucial for evaluating a company's performance.

More alternative expressions

Phrases that express similar concepts, ordered by semantic similarity:

Rate of stock turnover

Adds emphasis to the rate at which the inventory is replaced.

Merchandise turnover

Specifies turnover related to merchandise.

Goods turnover

Refers specifically to the turnover of goods.

Inventory velocity

Highlights the pace of inventory moving through a system.

Stock rotation

Focuses on the physical movement of stock.

Sales velocity

Emphasizes the speed at which products are sold.

Inventory management efficiency

Focuses on the effectiveness of managing inventory.

Efficient inventory handling

Highlights the efficiency of handling inventory.

Quick asset conversion

Describes how quickly inventory is converted to cash.

Inventory cycle

Describes the period in which inventory is purchased and sold.

FAQs

How is "inventory turnover" calculated?

Inventory turnover is calculated by dividing the cost of goods sold (COGS) by the average inventory value over a specific period. The formula is: Inventory Turnover = COGS / Average Inventory.

What does a high "inventory turnover" ratio indicate?

A high inventory turnover ratio generally suggests that a company is efficiently managing its inventory and has strong sales. However, it could also indicate that the company is not stocking enough inventory, potentially leading to lost sales opportunities.

What are some alternatives to "inventory turnover"?

You can use alternatives like "stock rotation", "inventory velocity", or "rate of stock turnover" depending on the specific context.

How does "inventory turnover" relate to profitability?

While a higher "inventory turnover" can contribute to profitability by reducing storage costs and minimizing the risk of obsolescence, it's essential to consider profit margins. A high turnover with low margins may not be as beneficial as a lower turnover with higher margins.