55,803,761 / 13,798,967 = 4.04 times a year*
The Company "turns its inventory over" 4.04 times a year.
the only difference here is it includes markups...
*The real or physical turnover is found by dividing inventory, which is carried at
cost, into "cost of sales." in this case the turnover would be 3.15 times a year.
43,480,981 / 13,798,967 = 3.15 times a year.
this is essentially what i gave you, only with the avg of two years it may remove some fluctuation, that's the only reason i can see for it...i guess as long as you are consistent...
the receivables ratio is important as well... i posted the days of inventory ratio which would have been 365/3.15=115.87 days to turn over inventory.
running this several times for the past will indicate management effectiveness in this area...comparing it to others in the field will tell you how mgmt sizes up against competition. it isn't very useful til you have something to compare it to...
fundamentalov in hockeytown
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