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 approximately 17 times per year by replenishing stores every two weeks, far outpacing traditional retailers who may turn stock 3–4 times annually.
Exam Focus
State what a high or low ratio means for that specific business context — an answer without interpretation scores AO1 only.
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