Turnover Rate Inventory is an important metric used to measure the efficiency of inventory management. It indicates how quickly a company sells or uses its inventory during a specified period of time, such as one year. A high turnover rate indicates that the company’s stock is selling or being used quickly which can be a sign of good business performance. A low turnover rate suggests that the company may have too much inventory and it could result in financially damaging losses. Monitoring the turnover rate of your inventory is essential for successful inventory management.