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Financial Terms | |
Inventory Turnover |
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Definition of Inventory TurnoverInventory TurnoverRatio of annual sales to inventory, which shows how many times the inventory of a firm is sold and replaced during an accounting period. INVENTORY TURNOVERThe number of times a company sold out and replaced its average stock of goods in a year. The formula is: Inventory turnoverThe number of times per year that an entire inventory or a Inventory turnoverThe ratio of annual sales to average inventory which measures the speed that inventory
Related Terms:inventory turnover ratioThe cost-of-goods-sold expense for a given Inventory Turnover RatioProvides a measure of how often a company's inventory is sold or Short-term solvency ratiosRatios used to judge the adequacy of liquid assets for meeting short-term ABC inventory classificationA method for dividing inventory into classifications, ![]() Accounts receivable turnoverThe ratio of net credit sales to average accounts receivable, a measure of how accounts receivable turnover ratioA ratio computed by dividing annual Asset turnoverThe ratio of net sales to total assets. asset turnovera ratio measuring asset productivity and showing the number of sales dollars generated by each dollar of assets asset turnover ratioA broad-gauge ratio computed by dividing annual Average-Cost Inventory MethodThe inventory cost-flow assumption that assigns the average Average inventoryThe beginning inventory for a period, plus the amount at the end of Blanket inventory lienA secured loan that gives the lender a lien against all the borrower's inventories. Book inventoryThe amount of money invested in inventory, as per a company’s Cash TurnoverThe number of cash cycles completed in one year. Days' sales in inventory ratioThe average number of days' worth of sales that is held in inventory. Distribution inventoryinventory intended for shipment to customers, usually dollar days (of inventory)a measurement of the value of inventory for the time that inventory is held Ending inventoryThe dollar value or unit total of goods on hand at the end of an Finished goods inventoryGoods that have been completed by the manufacturing Finished goods inventoryCompleted inventory items ready for shipment to First-In, First-Out (FIFO) Inventory MethodThe inventory cost-flow assumption that Fixed asset turnover ratioThe ratio of sales to fixed assets. Fixed Assets Turnover RatioA measure of the utilization of a company's fixed assets to Fluctuation inventoryExcess inventory kept on hand to provide a buffer against Hedge inventoryExcess inventories kept on hand as a buffer against contingent In-transit inventoryinventory currently situated between its shipment and delivery Inactive inventoryParts with no recent prior or forecasted usage. InventoryFor companies: Raw materials, items available for sale or in the process of being made ready for InventoryGoods bought or manufactured for resale but as yet unsold, comprising raw materials, work-in-progress and finished goods. InventoryThe cost of the goods that a company has available for resale. InventoryGoods that a firm stores in anticipation of its later sale or use as an input. InventoryThe cost of unsold goods that are held for sale in the ordinary course of business or InventoryThose items included categorized as either raw materials, work-inprocess, Inventory adjustmentA transaction used to adjust the book balance of an inventory Inventory DaysThe number of days it would take to sell the ending balance in inventory at the Inventory diversionThe redirection of parts or finished goods away from their intended Inventory issueA transaction used to record the reduction in inventory from a location, Inventory loanA secured short-term loan to purchase inventory. The three basic forms are a blanket Inventory receiptThe arrival of an inventory delivery from a supplier or other Inventory returnsinventory returned from a customer for any reason. This receipt inventory shrinkageA term describing the loss of products from inventory Inventory ShrinkageA shortfall between inventory based on actual physical counts and inventory inventory write-downRefers to making an entry, usually at the close of a Just-in-time inventory systemsSystems that schedule materials/inventory to arrive exactly as they are Last-In, First-Out (LIFO) Inventory MethodThe inventory cost-flow assumption that assigns the most recent inventory acquisition costs to cost of goods sold. The earliest inventory Maximum inventoryAn inventory item’s budgeted maximum inventory level, MERCHANDISE INVENTORYThe value of the products that a retailing or wholesaling company intends to resell for a profit. Minimum inventoryAn inventory item’s budgeted minimum inventory level. Moving average inventory methodAn inventory costing methodology that calls for the re-calculation of the average cost of all parts in stock after every purchase. Net inventoryThe current inventory balance, less allocated or reserved items. Obsolete inventoryParts not used in any current end product. Periodic inventoryA physical inventory count taken on a repetitive basis. Periodic inventory systemAn inventory system in which the balance in the inventory account is adjusted for the units sold only at the end of the period. Perpetual inventoryA system that continually tracks all additions to and deletions Perpetual inventoryA manual or automated inventory tracking system in which Perpetual inventory systemAn inventory system in which the balance in the inventory account is adjusted for the units sold each time a sale is made. Physical inventoryA manual count of the on-hand inventory. Portfolio turnover rateFor an investment company, an annualized rate found by dividing the lesser of Raw materials inventoryThe total cost of all component parts currently in stock that Receivables turnover ratioTotal operating revenues divided by average receivables. Used to measure how Reconciling inventoryThe process of comparing book to actual inventory balances, Seasonal inventoryVery high inventory levels built up in anticipation of large Surplus inventoryParts for which the on-hand quantity exceeds forecasted Total asset turnoverThe ratio of net sales to total assets. Total Asset Turnover RatioA measure of the utilization of all of a company's assets to TurnoverMutual Funds: A measure of trading activity during the previous year, expressed as a percentage of TurnoverThe business income or sales of goods and services. vendor-managed inventorya streamlined system of inventory Vendor-managed inventoryThe direct management and ownership of selected Work-in-process inventoryinventory that has been partially converted through the Slow-moving itemAn inventory item having a slower rate of turnover than the Related to : financial, finance, business, accounting, payroll, inventory, investment, money, inventory control, stock trading, financial advisor, tax advisor, credit. |