Inventory turnover (Inventory turns)
How many times a year the company sells and replaces its entire stock.
Slowing turnover is often the first quantitative sign that products are not selling.
How it is computed here
Cost of revenue / inventory
Combines more than one basis. See the note. The pipeline prefers the data vendor's published trailing-twelve-month ratio when one exists, and falls back to recomputing from the latest filed fiscal year when it does not. Those two are different measurements: the vendor figure puts twelve months of flow over the most recent quarterly balance sheet. The source trail on each figure names which path produced it. Filed under quality. Higher is the stronger reading, other things equal.
No published threshold exists for this figure, so this page prints none. Read it against the company's own history and its peers instead.
When it misleads
- Meaningless for businesses that hold no inventory, where it is withheld rather than shown as zero.
- There is no cross-industry threshold worth printing. The peer percentile against companies in the same industry is the only defensible reading.
- A year-end balance is a snapshot; seasonal businesses distort it badly.
Not meaningful for banks, insurers, REITs: the product prints n/m with the reason rather than a number for them.
Questions
How is inventory turnover calculated?
Cost of revenue / inventory. Combines more than one basis. See the note. The pipeline prefers the data vendor's published trailing-twelve-month ratio when one exists, and falls back to recomputing from the latest filed fiscal year when it does not. Those two are different measurements: the vendor figure puts twelve months of flow over the most recent quarterly balance sheet. The source trail on each figure names which path produced it.
What does inventory turnover tell a value investor?
Slowing turnover is often the first quantitative sign that products are not selling.
When does inventory turnover mislead?
Meaningless for businesses that hold no inventory, where it is withheld rather than shown as zero. There is no cross-industry threshold worth printing. The peer percentile against companies in the same industry is the only defensible reading. A year-end balance is a snapshot; seasonal businesses distort it badly.