Accounting Inventory Turnover is a business metric which measures the rate at which inventory is sold or used and then replaced. It is calculated by taking the total cost of goods sold and dividing it by the average inventory. A high turnover rate is desired, as it indicates that the company is efficiently utilizing its inventory while a low turnover rate could indicate inefficient practices or excess inventory. In order to better manage stock and reduce costs, businesses should strive to maintain an effective accounting inventory turnover.