The formula to calculate Inventory Turnover Ratio (ITR) is:
\[ \text{ITR} = \frac{\text{COGS}}{\text{In}} \]
Where:
Inventory Turnover Ratio measures the number of times your inventory "turned-over" during a time period.
Let's assume the following values:
Using the formula:
\[ \text{ITR} = \frac{40000}{45000} \]
Evaluating:
\[ \text{ITR} = 0.8889 \]
The Inventory Turnover Ratio is 0.8889.
| Cost of Goods Sold | Inventory | Inventory Turnover Ratio |
|---|---|---|
| 38000 | 43000 | 0.8837 |
| 38000 | 44000 | 0.8636 |
| 38000 | 45000 | 0.8444 |
| 38000 | 46000 | 0.8261 |
| 38000 | 47000 | 0.8085 |
| 39000 | 43000 | 0.9070 |
| 39000 | 44000 | 0.8864 |
| 39000 | 45000 | 0.8667 |
| 39000 | 46000 | 0.8478 |
| 39000 | 47000 | 0.8298 |
| 40000 | 43000 | 0.9302 |
| 40000 | 44000 | 0.9091 |
| 40000 | 45000 | 0.8889 |
| 40000 | 46000 | 0.8696 |
| 40000 | 47000 | 0.8511 |
| 41000 | 43000 | 0.9535 |
| 41000 | 44000 | 0.9318 |
| 41000 | 45000 | 0.9111 |
| 41000 | 46000 | 0.8913 |
| 41000 | 47000 | 0.8723 |
| 42000 | 43000 | 0.9767 |
| 42000 | 44000 | 0.9545 |
| 42000 | 45000 | 0.9333 |
| 42000 | 46000 | 0.9130 |
| 42000 | 47000 | 0.8936 |