Inventory Turnover
Proxy: Inventory Turnover Ratio
Definition & Description
Inventory Turnover shows how many times a company sold and replaced its inventory over a period. It assesses supply chain efficiency and stock movement.
How to Use (Panel Data)
Widely used in operations and management accounting research to measure supply chain efficiency. A high ratio indicates fast movement, but if too high, risks stockouts.
Full Explanation Article
A low turnover figure can be an early signal of product obsolescence, overproduction, or weakening market demand.
This variable is frequently paired with Receivables Turnover to form the Cash Conversion Cycle metric.
Related Reference Journals
- [1]Garg, A., Ghosh, J., & Shah, J. (2015). Supply chain performance and firm performance.
- [2]Chen, H., Frank, M. Z., & Wu, O. Q. (2005). What actually happened to the inventories of American companies between 1981 and 2000?
Research Ideas
Effect of Inventory Turnover and Accounts Receivable Turnover on Retail Liquidity.
Inventory Management Analysis on Cash Conversion Cycle in the FMCG Industry.
Frequently Asked Questions (FAQ)
What is the difference between this proxy and regular accounting variables?
For detailed information about this proxy, please refer to the article above. NgepetData can automatically extract the required data from your PDF Annual Report.
Where does the data come from to calculate this proxy?
For detailed information about this proxy, please refer to the article above. NgepetData can automatically extract the required data from your PDF Annual Report.
Can this proxy be used for all industry sectors?
For detailed information about this proxy, please refer to the article above. NgepetData can automatically extract the required data from your PDF Annual Report.