Inventory turns

Inventory turns - It is for a company that the ratio of annual sales to inventory or the equivalently or the fraction of the year that an average item remains in inventory. Low turnover is a sign of inefficiency, since inventory usually has a rate of return of zero. For a mutual fund, the number of times per year that a average dollar of assets is reinvested. The ration can be represent two different ways the first is the top line is the sale the bottom line is there inventory to equal the inventory turnover. The second way is the top line is cost of the goods sold the bottom line is the average inventory to equal the inventory turnover.