Calculating inventory turns per year is a useful metric for assessing how efficiently businesses use their inventory. It helps organizations understand how quickly they are selling and how much product needs to be stocked each year. Inventory turn is determined by taking the cost of goods sold (COGS) divided by the average inventory over a certain period of time, usually one year. This figure provides a measure of how fast an organization is turning over its inventory, as well as providing an indication of its future sales. By understanding this metric, businesses can ensure that they have enough products on hand when demand is high, while avoiding costly excess inventory when demand is low.