Average Inventory Turnover is a measure of a company’s ability to sell its products and services. It looks at the number of times the average inventory has been sold during a given period, expressed as the cost of goods sold divided by the average inventory value. This metric helps businesses understand how efficiently they are converting their inventory into cash, providing them with valuable insights on their overall performance. By calculating their Average Inventory Turnover and tracking it over time, companies can identify areas where improvements can be made to increase sales and reduce costs.