Inventory Turnover Ratio is a performance measurement that illustrates how efficiently businesses are using their inventory to generate revenue. This metric helps investors better understand a company’s strategy and operations by calculating how often an organization’s stock of goods is sold and replaced over a given period. A high turnover ratio indicates efficient use of inventory, while a low one suggests that the business might be struggling to sell its products or has too much stock on hand. By keeping an eye on this key indicator, companies can ensure they’re making the most of their investments in inventory – and staying competitive in a changing retail environment.