Revenue to Inventory Ratio (RIR) is a key financial indicator that evaluates a business’s success in turning their inventory into cash. It represents the amount of sales generated relative to the level of inventory held by the company. The higher the RIR, the more efficient a company has been at turning its inventory into revenue, which can indicate greater financial health. Companies strive for an RIR that is as high as possible, to ensure they maximize profitability and minimize losses due to stock spoilage or goods becoming outdated. Evaluating this ratio on a regular basis helps businesses identify areas where they can improve their inventory management strategies.