Question

20. What is the formula to calculate the inventory turns rate in retail dollars and at cost

Answer 1

$\bold{\text {Inventory Turnover }=\frac{\text {Cost of Merchandise Sold}}{\text {Average Stock for Period}}}$

Explanation:

The sooner a stock turnover happens, the more profitable a business operates while enjoying a greater return on its capital and other resources. The stock turnover rate, otherwise known as inventory changes, provides insight into the productivity of a business, both actual and comparative, while turning its money into revenues and profits.

For Example:

When two organizations do have 20 million in stock, the one which sells everything in 30 days has good cash balance and lower incidence than the one which requires 60 days to do.