Inventory Turnover Ratio - Meaning, Formula, Calculation & Interpretations

Поделиться
HTML-код
  • Опубликовано: 5 окт 2024
  • This tutorial provides a comprehensive overview of the Inventory Turnover ratio, including its meaning, formula, calculations, and interpretation. Using a practical colgate case study example, we will learn how to calculate this inventory turnover ratio in excel.
    You can download the Colgate Inventory Turnover Ratio template from this link - www.wallstreet...
    What is Inventory Turnover Ratio?
    --------------------------------------------
    The Inventory Turnover Ratio examines how quickly a company replaces its current inventory and converts it into sales. A higher ratio means the company's product is in high demand and sells quickly, resulting in fewer inventory management costs and more profits.
    Formula
    --------------------------------------------
    Inventory Turnover Ratio Formula = Cost of Goods Sold / Average Inventory
    Interpretation of Inventory Turnover Ratio
    --------------------------------------------
    High Inventory Turnover Ratio - This indicates that the company has done a good job of managing its inventory, with lower holding costs and fewer risks of obsolescence.
    Low Inventory Turnover Ratio - This implies that the company's products aren't frequently sold in the market, and its inventory becomes slow-moving, resulting in higher inventory costs and lower earnings.
    For more details, you can refer to our article - www.wallstreet...
    Connect with us!
    RUclips ► / @wallstreetmojo
    LinkedIn ► / mycompany
    Facebook ► / wallstreetmojo
    Instagram ► www.instagram....
    Twitter ► / wallstreetmojo

Комментарии • 21

  • @jyotikrupashankarsingh2582
    @jyotikrupashankarsingh2582 3 года назад +3

    Your interpretation of the Inventory turnover ratio was very comprehensive. Also, the Colgate case study was very easy to understand.

  • @preciouselebua2737
    @preciouselebua2737 Год назад

    Just found this video and it helped me understand better with industry analysis.

  • @teresadcruz4573
    @teresadcruz4573 3 года назад +1

    Nice and interesting video. Great explanation with step by step example.

  • @ashmitjacob4659
    @ashmitjacob4659 3 года назад +1

    Very informative tutorial.Thank you.

  • @kuntalmukhopadhyay879
    @kuntalmukhopadhyay879 3 года назад

    I come from science background. But it are very easy to understand. Thank you very much sir. Please post a video on Free Cash flow and how to calculate reinvestment ratio, ROCE

  • @narayanbista490
    @narayanbista490 3 года назад

    Amazing video with detailed information to it.

  • @NS_Kat
    @NS_Kat 3 месяца назад +1

    Thank you.

    • @wallstreetmojo
      @wallstreetmojo  2 месяца назад

      Hi, Check out our Free and Paid courses at www.wallstreetmojo.com/all-courses/ .
      Kindly contact us at support@wallstreetmojo.com for course/ free offers and coupons related inquiries. 🙂

  • @DerekAlfaro-h8m
    @DerekAlfaro-h8m 8 месяцев назад

    So, beg Inventory and end inventory are just blips in time measurements?
    And the average of the inventory is a measure of cost value or retail value?
    Thanks, nice video.

  • @ankushkayshap5611
    @ankushkayshap5611 Год назад +1

    Please help
    Inventory turnover ratio = Cogs/ Avg Inventory , how this formula derived and comes to conclusion company efficiently sells its inventory.

  • @anaybagchi7682
    @anaybagchi7682 3 года назад +1

    very interesting video

  • @wallstreetmojo
    @wallstreetmojo  3 года назад

    Download the Colgate inventory turnover ratio excel template used in this video from this link - www.wallstreetmojo.com/ratio-analysis-template/

  • @mohamedgamal9903
    @mohamedgamal9903 2 года назад

    great video really ... but for sorry I can't download the file .. i put my email and press download but the download didn't start

  • @alanlukowiecki3422
    @alanlukowiecki3422 2 года назад

    can inventory turnover be measured in weeks?

  • @naveensoni4178
    @naveensoni4178 2 года назад

    Nice explanations

  • @varunbhaktha2424
    @varunbhaktha2424 Год назад

    Good 👍

    • @wallstreetmojo
      @wallstreetmojo  Год назад

      Appreciate your feedback, more content coming soon!