Stock Turnover
(Inventory Turnover - already covered).
Formula
Stock Turnover = Cost of Goods Sold ÷ Average Stock
Real World
Tesco turns over its fresh food stock multiple times per week, whereas a luxury car dealership like Ferrari may hold vehicles for months — both strategies are deliberate but reflect very different business models.
Exam Focus
State whether a high or low turnover is desirable given the industry context — never assume high turnover is always better.
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