Inventorty turnover ratio

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

11 October 2011 HI

RESPECTED MEMBBER

I WANT TO KNOW MEANING OF INVENTORY TURNOVER RATIO?

WHAT IS GOOD FOR COMPANY WHETHER IT SHOULD BE HIGH OR LOW?

WHAT IS CONSEQUENCES OF HIGH AND LOW TURNOVER RATIO?

FOR GOOD COMPANY PERFORMANCE WHAT SHOULD BE THERE HIGH OR LOW?

CA Satish Badve

CA Satish Badve (Expert)
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11 October 2011 Inventory Turnover ratio ratio represents number of times the inventory converted in to turnover. A high inventory turnover ratio represents a healthy and positive sign as it means less duration of holding inventory, whereas a low ratio means excessive and long holding period of inventory which ultimately results in high inventory holding cost.