By Dr. John T. Drea, Western
Illinois University
Stockturn Rate
lDefined: the number of times the average inventory is sold in a year
Stockturn
rate = Cost of goods sold/average inventory at cost
Example:
The CGS for Company X in 1998 was $2.5 million.
Inventory
levels were:
Date Inventory at cost
3/31/98 $140,000
6/30/98 $150,000
9/30/98 $110,000
12/31/98 $100,000
What’s the
stockturn
rate?