Inventory Turns

MarketWatch  Oct 30  Comment 
Advanced Micro Devices Inc. shares dropped Monday after an analyst voiced doubts about the chipmaker’s potential for growth, especially in gaming and cryptocurrency, adding to a sharp four-day decline since the company reported earnings last week.
MarketWatch  Aug 10  Comment 
Blue Apron Holdings Inc beat second-quarter revenue expectations Thursday morning, but reported wider-than-expected losses in its first report as a public company. Shares initially climbed up to 9% after the earnings were released, but later...
MarketWatch  Jul 21  Comment 
GE's stock turns sharply lower after CEO Immelt gives downbeat outlook
MarketWatch  Jul 13  Comment 
AMD’s stock erased early gains to close sharply lower on heavy volume, as it mirrored the reversal seen in prices of bitcoin rival Ether.
MarketWatch  Oct 18  Comment 
Shares of Sprint Corp. turned lower in morning trade Tuesday, after the telecommunications company disclosed preliminary second-quarter results. The company said in a filing with the Securities and Exchange Commission that losses for the quarter...
MarketWatch  May 26  Comment 
Shares of Cotiviti Holdings Inc. , which provides payment accuracy services to healthcare providers, fell below its initial public offering price in morning trade Thursday. The stock's first trade was at $19 at 10:45 a.m. ET, matching the IPO...
MarketWatch  Apr 17  Comment 
Honeywell's stock turns lower, drops 3.6% after first-quarter results
SeekingAlpha  Oct 16  Comment 
By EnergyProfitProphet: The SolarCity (NASDAQ:SCTY) books are a mystery. Supposedly this is a valuable company but it bleeds money like crazy. That's the opposite of what you want when heading toward a recession. So, are we heading into a...


This is calculated by dividing the cost of goods sold by the average inventory in a given period.

Inventory Turns, also commonly called stock turns, stock turnover or just turns is a business management term referring the the number of times goods are sold or used in a year.

The formula for calculating is as follows:

Image:Inventory Turn.png

Items with a lower inventory turn have higher retention costs. For example, compared to an item with a one for inventory turn, another item with an inventory turn of three would have a lower holding (retention) cost. Increasing inventory turns is generally sought after for three major cost related reasons:

  • An item with a higher inventory turn has a lower holding cost. Holding costs include the cost of rent,warehousing fees, lost due to theft, and maintenance fees needed to keep the good.
  • Reducing holding costs will in turn raise net income and profits.
  • Items which turn over more quickly are much more responsive to customer needs and wants which help to replace obsolete items in the market.
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