Inventory turnover measures the length of time it takes to acquire, sell, and replace the inventory.

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Inventory turnover measures how many times a company's inventory is sold and replaced within a given period (usually one year), not the length of time it takes to acquire, sell, and replace the inventory. It is calculated by dividing the cost of goods sold by the average inventory value during the same period.

Inventory Turnover Measures the Length of Time It Takes to Acquire