The average inventory turnover ratio tells the owner how fast merchandise is moving through the business.

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The average inventory turnover ratio is a measure of how many times a company's stock of inventory is sold and replaced over a period of time, such as a year. It indicates how well the business is managing its inventory levels and how quickly it is turning over its inventory. As such, a higher inventory turnover ratio is generally considered better than a lower ratio, as it means that the company is selling its merchandise more quickly and efficiently.

The Average Inventory Turnover Ratio Tells the Owner How Fast