What is Inventory Turnover Ratio (ITR)?
An authoritative operational guide, calculation formulas, real-world e-commerce examples, and margin optimization strategies.
Inventory Turnover Ratio measures the number of times a business sells and replaces its inventory over a specified period (typically annually or quarterly).
Formula & Calculation
Real-World E-Commerce Example
If annual COGS is ₹60,00,000 and average inventory held is ₹10,00,000: ITR = 6.0. The business turns its inventory completely 6 times a year (every 60 days).
How Inventory Turnover Ratio (ITR) Impacts Your Margins
Higher inventory turnover indicates efficient capital usage, lower holding costs, and minimal dead stock risk.
How PointNXT Automates & Solves This
PointNXT tracks real-time sales velocity and turnover metrics per SKU, helping merchants optimize inventory purchasing and eliminate slow-moving stock.
Related Operations & Logistics Concepts
Common Questions: Inventory Turnover Ratio (ITR)
What is Inventory Turnover Ratio (ITR) in simple terms?
Inventory Turnover Ratio measures the number of times a business sells and replaces its inventory over a specified period (typically annually or quarterly).
How does Inventory Turnover Ratio (ITR) affect e-commerce margins?
Higher inventory turnover indicates efficient capital usage, lower holding costs, and minimal dead stock risk.
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