Inventory Turnover Ratio is an important metric used in business to assess the efficiency of a company’s inventory management. It measures how quickly products are being sold and replaced in terms of volume. The higher the ratio, the more efficient the company is at managing its inventory; it indicates that products or materials are being sold quickly and replaced with fresh stock frequently. Companies with high turnover ratios are able to optimize their production by anticipating customer demand and buying accordingly so they don’t end up with too much or too little inventory. By regularly monitoring and analyzing their inventory turnover ratio, businesses can save money and improve their profits.