Inventory turnover
How quickly stock turns into goods sold: how many times it was replaced over the period, or how many days it sat in the warehouse.
Formula
Average inventory is the mean of the opening and closing balances. The figure in days is the length of the period divided by the number of turns.
How to read the number
Slowing while revenue is flat is an early sign that the goods have stopped selling — visible before revenue falls.
When the metric lies
Where it is used
The metric is calculated across every security in the catalogue and appears on the instrument card, in the multiples table and in the screener.
Also known as: days inventory