In the business world, having good inventory turnover ratio is essential for staying afloat. It’s a measure of your company’s efficiency in managing its inventory and converting it into sales. A higher inventory turnover ratio means that more of your inventory turns into sales quickly, allowing you to reinvest money back into the business. An ideal ratio should hover around 8.0 or higher; any lower than that could indicate potential issues with your inventory management process. To get this ratio, simply divide your cost of goods sold by your average inventory value. By actively monitoring your inventory turnover ratio, business owners can make quick and informed decisions about their products and services – leading to better financial stability and improved overall performance.