Inventory turnover, also known as the inventory turnover ratio, represents the frequency with which a business sells and replenishes its stock of goods within a specific period. It is calculated by dividing the cost of goods sold by the average inventory during that period. A high inventory turnover indicates that goods are being sold rapidly, suggesting efficient sales and minimal excess inventory. Conversely, a low turnover rate suggests sluggish sales and excess inventory, which can pose challenges for a business. Comparisons of inventory turnover against historical data, planned ratios, and industry averages can help assess competitiveness and performance within the industry. Regular monitoring of inventory turnover is a prudent management practice to maintain a reasonable investment in inventory.