Calculate Turnover Ratio is an important measure of a company’s performance, specifically how quickly it is able to sell its products and services. It is calculated by taking the total sales generated over a certain time period and dividing them by the amount of inventory or stock on hand at the beginning of that same time period. This ratio gives business owners a clear indication of how well their company is performing in terms of generating sales—and it also helps to identify any potential areas for improvement. By analyzing and understanding this ratio, a business can make better decisions about how to optimize its operations going forward.