Inventory Turnover
How many times inventory is sold/replaced per period.
Formula
Inventory Turnover = Cost of Sales ÷ Average Inventory
Real World
Zara turns over its clothing inventory around 12–15 times per year by refreshing collections every two weeks, far outpacing rivals like H&M who hold stock longer.
Exam Focus
Always use Cost of Sales (not Revenue) in the formula; using Revenue is the most common calculation error examiners flag.
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