Average Inventory Turnover Formula is a business metric used to evaluate how efficiently inventory is managed. It measures how many times per year a company sells through its average inventory and can be used as an indicator of whether the inventory on hand is sufficient or too excessive. The formula for calculating Average Inventory Turnover Formula is: (Cost of Goods Sold / Average Inventory) x 365 days. Knowing your Average Inventory Turnover Formula is essential for businesses to monitor their performance, identify areas for improvement, and adjust their strategies accordingly. Put simply, it’s the ultimate gauge for evaluating inventory management success.