The inventory turnover ratio is a key metric used to measure the effectiveness of a company’s stock management. It calculates how quickly a business moves through its inventory over a given period. This ratio helps business owners to understand how successful their efforts are in managing stock and selling it off as profit. By keeping an eye on this ratio, businesses can identify if they’re making smart decisions about stocking up on inventory or not, and if there are any improvements that need to be made. It’s the ultimate measure of success for efficient inventory management.