eHow launches Android app: Get the best of eHow on the go.
(0 Ratings)
How to Define a Business Unit
How to Define a Matrix Structure
How to Define a Payback Period
How to Define a Purchase Discount
How to Define a W-2 Form
How to Define an Interest Expense
How to Define an Inventory Turn
How to Define Capital Expenditure
How to Define Cost Plus Profit
How to Define CPI
How to Define Gross Profit
How to Define Gross Profit Percentage
How to Define Inventory Turnover Ratio
How to Define Margins
How to Define Operating Income
How to Define Operating Margins
How to Define Opportunity Costs
How to Define Perpetuity
How to Define PERT
How to Define Retail Margins
How to Define Simple Interest
How to Define Static Budgets
How to Define Strategy Development
Before liquidating a family's estate, contact an attorney to find out what exactly needs to be done. Liqui… More
Inventory turn is used to measure the efficiency of a business by looking at the number of time inventory … More
Inventory turnover ratio is the number of times that inventory is sold and replenished in a given period. … More
Chapter 7 bankruptcy is the most common form of bankruptcy that is filed for in the U.S., and its primary … More
If you are considering buying or selling a business, you will first need to find out how much the company … More
You should always prepare for the worst--which is why you have homeowners' or renters' insurance. But what… More
Inventory is that part of a business' assets that are available for sale to clients and customers. It does… More
A band that travels for shows needs to have all of its necessary equipment to put on a performance. This e… More
The typical homeowner may not think about taking a home inventory until the unthinkable has happened. A ho… More
To make an inventory checklist of household items, write down everything of value in a house, take picture… More
Summary: Inventory turnover ratio is the number of times that inventory is sold and replenished in a given period. Determine inventory turnover ratio by calculating the cost of sales divided by the average inventory with help from a certified public accountant in this free video on business and accounting terms.
Henry Gutter is a certified public accountant located in El Segundo, Calif. With more than 25 years of experience in finance and accounting, Gutter continues to practice with a diverse...read more
"Now we're going to talk about inventory turnover ratios. This ratio represents the number of times that inventory is sold and replenish in a given period. Let's say for example, we this, we go into the business of selling socks and we buy one hundred thousand dollars worth of socks to sell it a profit. After adding new purchases for the current years, say a million dollars and deducting the cost sold during the year of nine hundred and twenty thousand dollars, the remaining inventory at the end of that year would be one hundred and eighty thousand. The inventory turnover ratio we calculated as the cost of sales divided by the average inventory. And in this example, we sold nine hundred twenty thousand dollars of socks that is at our cost and we divide that by the average inventory for the year which was ninety thousand dollars; our inventory turnover ratio would be 6.5"
eHow Article: How to Define Inventory Turnover Ratio
Copyright © 1999-2009 eHow, Inc. Use of this web site constitutes acceptance of the eHow Terms of Use and Privacy Policy. en-US Portions of this page are modifications based on work created and shared by Google and used according to terms described in the Creative Commons 3.0 Attribution License.
