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Inventory Turnover Ratio – Meaning, Formula, Calculation & Interpretations [Video]

Inventory Turnover Ratio – Meaning, Formula, Calculation & Interpretations

This tutorial provides a comprehensive overview of the Inventory Turnover ratio, including its meaning, formula, calculations, and interpretation. Using a practical colgate case study example, we will learn how to calculate this inventory turnover ratio in excel.

You can download the Colgate Inventory Turnover Ratio template from this link – https://www.wallstreetmojo.com/ratio-analysis-template/

What is Inventory Turnover Ratio?
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The Inventory Turnover Ratio examines how quickly a company replaces its current inventory and converts it into sales. A higher ratio means the company’s product is in high demand and sells quickly, resulting in fewer inventory management costs and more profits.

Formula
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Inventory Turnover Ratio Formula = Cost of Goods Sold / Average Inventory

Interpretation of Inventory Turnover Ratio
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– High Inventory Turnover Ratio – This indicates that the company has done a good job of managing its inventory, with lower holding costs and fewer risks of obsolescence.
– Low Inventory Turnover Ratio – This implies that the company’s products aren’t frequently sold in the market, and its inventory becomes slow-moving, resulting in higher inventory costs and lower earnings.
For more details, you can refer to our article – https://www.wallstreetmojo.com/inventory-turnover-ratio-formula/

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Resources for Accountants

From Lawyer in Bolivia to Successful US Accountant: 3 Steps to Make It Happen [Video]

Ever wondered if you can switch careers and build a successful accounting career in the USA as an immigrant? 🌎 Meet Monica, a former lawyer from Bolivia who followed 3 key steps to transition into accounting in the U.S.! In this interview, we cover: ✅ The biggest challenges of switching careers as an immigrant ✅ The exact 3 steps that helped Monica become a successful accountant ✅ How YOU can start your journey—even with no U.S. experience! Join the EXACT course Monica enrolled in: https://controller-academy.com/courses/controller-academy Time Stamps: 00:00 Intro 00:47 Monica's Background 01:47 Monica's Job Responsibilities 02:56 Monica's Goal in 5 Years 04:47 Monica's Learned This From My Course 06:08 Monica's fav TV Show & Music 08:42 Monica's Journey To the US ----------------------------------- Hang Out with me on social media: 📸 https://www.instagram.com/the_financial_controller/ 📱https://www.tiktok.com/@thefinancialcontroller https://www.linkedin.com/in/bill-hanna-cpa-7653a851/ DISCLAIMER: Links included in this description might be affiliate links. If you happen to purchase a product or service with the links that I provide I may receive a small commission. There is no additional charge to you! Thank you for supporting my channel so I can continue to provide you with free content each week! All views expressed on my channel are mine alone. Not intended as financial or professional advice

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Resources for Accountants

Inspiring Short Stories | Seeking Happiness | Motivational & Inspirational Video [Video]

Seeking Happiness. Inspiring short stories. Motivational & inspirational video. Best short inspirational videos. Inspirational quotes about life and love.The motivational stories and famous anecdotes presented in this video are excerpts from our book: Top 100 motivational stories: the best inspirational short stories and anecdotes of all time. Get the book here: https://www.bizmove.com/inspiration/m9b.htm

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Resources for Accountants

10 Building Blocks for New Business Success | Starting a Small Business [Video]

Starting a new business is both an exhilarating and challenging endeavor. The road to success is paved with more than just innovative ideas; it requires careful planning, strategic thinking, and diligent execution. In today's competitive landscape, entrepreneurs must equip themselves with the essential tools and knowledge to navigate the complexities of building a thriving enterprise. By focusing on key foundational elements, aspiring business owners can significantly increase their chances of long-term success. Here are ten essential building blocks for new business success, designed to guide you from inception to growth and sustainability.