Inventory Turnover Measures is a vital indicator of a business’s performance, reflecting how often a company sells and replaces its stock. It represents the ratio of a company’s cost of goods sold to its average inventory for a specified period – typically over the course of a year. The higher the inventory turnover, the more efficiently a company is managing its inventory and generating revenue from sales. By keeping an eye on your company’s Inventory Turnover Measures, you can remain mindful of how well your business is running, spot potential problems before they become too severe – and ultimately increase your profits.