{"id":24818,"date":"2024-09-13T09:58:41","date_gmt":"2024-09-13T13:58:41","guid":{"rendered":"https:\/\/www.sage.com\/en-us\/blog\/?p=24818"},"modified":"2025-04-28T04:19:37","modified_gmt":"2025-04-28T08:19:37","slug":"a-guide-to-inventory-turnover-ratio","status":"publish","type":"post","link":"https:\/\/www.sage.com\/en-us\/blog\/a-guide-to-inventory-turnover-ratio\/","title":{"rendered":"A guide to inventory turnover ratio"},"content":{"rendered":"<header class=\"entry-header has-dark-background-color entry-header--has-illustration entry-header--has-illustration--generic\">\n\t<div class=\"container\">\n\t\t<div class=\"entry-header__row row align-center\">\n\t\t\t<div class=\"col col-lg-7 col-xlg-6 entry-header__content\">\n\t\t\t\t\t\t\t<div class=\"component component-single-header\">\n\t\t\t\t\t\t\t\t\t\t<div class=\"entry-header__misc text--subtitle text--uppercase text--small\">\n\t\t\t\t\t\t\t<a href=\"https:\/\/www.sage.com\/en-us\/blog\/category\/strategy-legal-operations\/\" class=\"entry-header__link\">Strategy, Legal &amp; Operations<\/a>\t\t\t\t\t\t<\/div>\n\t\t\t\t\n\t\t\t\t<div class=\"entry-title-wrapper\">\n\t\t\t\t\t<h1 class=\"entry-title\">\n\t\t\t\t\t\tA guide to inventory turnover ratio\t\t\t\t\t<\/h1>\n\t\t\t\t<\/div>\n\n\t\t\t\t\t\t\t\t\t<p class=\"entry-header__description\">\n\t\t\t\t\t\t\t\t\t\t\t<\/p>\n\t\t\t\t\n\t\t\t\t\n\t\t\t\t\n\t\t\t<\/div>\n\n\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t<\/div>\n\t\t<div class=\"single-post-details container\">\n\t\t<div class=\"col\">\n\t\t\t<span class=\"posted-on \"><time class=\"entry-date published\" datetime=\"2024-09-13T09:58:41-04:00\">September 13, 2024<\/time><\/span><span class=\"reading-time\"> min read<\/span>\n\t\t<button\n\t\t\ttype=\"button\"\n\t\t\tclass=\"social-share-button button button--icon button--secondary js-social-share-button\"\n\t\t\tdata-share-title=\"A guide to inventory turnover ratio\"\n\t\t\tdata-share-url=\"https:\/\/www.sage.com\/en-us\/blog\/a-guide-to-inventory-turnover-ratio\/\"\n\t\t\tdata-share-text=\"Please read this interesting article\"\n\t\t>\n\t\t\t<span class=\"social-share-button__share-label\">Share<\/span>\n\t\t\t<span class=\"social-share-button__copy-label\" hidden>Copy Link<\/span>\n\t\t\t<span class=\"social-share-button__copy-tooltip\" aria-hidden=\"true\" hidden>Copied<\/span>\n\t\t<\/button>\n\n\t\t\t\t<\/div>\n\t<\/div>\n\t<\/header>\n\n\n<div class=\"wp-block-post-author has-dark-background-color alignfull\">\n\t<div class=\"container\">\n\t\t<div class=\"col\">\n\t\t\t\t\t\t\t<div class=\"co-authors\">\n\t\t\t\t\t\n\t\t<div class=\"entry-author-wrapper\">\n\t\t\t<a class=\"entry-author\" href=\"https:\/\/www.sage.com\/en-us\/blog\/author\/michellecornish\/\">\n\t\t\t\t<img loading=\"lazy\" decoding=\"async\" width=\"40\" height=\"40\" src=\"https:\/\/www.sage.com\/en-us\/blog\/wp-content\/uploads\/sites\/2\/2023\/11\/Michelle-Cornish-350x350.jpg\" class=\"entry-author__image\" alt=\"\" srcset=\"https:\/\/www.sage.com\/en-us\/blog\/wp-content\/uploads\/sites\/2\/2023\/11\/Michelle-Cornish-350x350.jpg 350w, https:\/\/www.sage.com\/en-us\/blog\/wp-content\/uploads\/sites\/2\/2023\/11\/Michelle-Cornish.jpg 600w\" sizes=\"auto, (max-width: 40px) 100vw, 40px\" \/>\t\t\t\t<span class=\"entry-author__name\">Michelle Cornish<\/span>\n\t\t\t<\/a>\n\n\t\t\t\t\t<\/div>\n\n\t\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t<\/div>\n<\/div>\n\n\n\n<p>Your monthly inventory tracking lets you see whether sales are humming along or stumbling. <\/p>\n\n\n\n<p>However, for a more precise evaluation of stock flow, and how it affects your bottom line, you can use the inventory turnover ratio to measure the efficiency of stock management in your business, in monetary terms.&nbsp;<\/p>\n\n\n\n<p>A solid understanding of the inventory turnover ratio can reveal how effectively you&#8217;re converting inventory into sales, impacting your cash flow, storage costs, and ultimately, your profitability.&nbsp;<\/p>\n\n\n\n<p>This comprehensive guide will walk you through the essentials of the inventory turnover ratio, including how to calculate it, interpret the results, and implement strategies to optimize inventory management.<\/p>\n\n\n<?xml encoding=\"utf-8\" ?><div class=\"wp-block-yoast-seo-table-of-contents yoast-table-of-contents\"><ul><li><a href=\"#h-how-to-calculate-inventory-turnover-ratio\" data-level=\"2\">How to calculate inventory turnover ratio<\/a><\/li><li><a href=\"#h-what-is-inventory-turnover\" data-level=\"2\">What is inventory turnover?<\/a><\/li><li><a href=\"#h-what-is-inventory-turnover-ratio\" data-level=\"2\">What is inventory turnover ratio?<\/a><\/li><li><a href=\"#h-what-does-the-inventory-turnover-ratio-tell-you\" data-level=\"2\">What does the inventory turnover ratio tell you?<\/a><\/li><li><a href=\"#h-what-is-a-good-inventory-turnover-ratio\" data-level=\"2\">What is a good inventory turnover ratio?<\/a><ul><li><a href=\"#h-industry-characteristics\" data-level=\"3\">Industry characteristics<\/a><\/li><li><a href=\"#h-business-model\" data-level=\"3\">Business model<\/a><\/li><li><a href=\"#h-product-type\" data-level=\"3\">Product type<\/a><\/li><\/ul><\/li><li><a href=\"#h-inventory-turnover-ratio-in-action\" data-level=\"2\">Inventory turnover ratio in action<\/a><\/li><li><a href=\"#h-what-does-this-mean-for-green-thumb-gardening-supplies-nbsp\" data-level=\"2\">What does this mean for Green Thumb Gardening supplies?&nbsp;<\/a><\/li><li><a href=\"#h-what-does-a-low-inventory-turnover-ratio-mean\" data-level=\"2\">What does a low inventory turnover ratio mean?<\/a><\/li><li><a href=\"#h-is-high-inventory-turnover-good\" data-level=\"2\">Is high inventory turnover good?<\/a><\/li><li><a href=\"#h-how-to-increase-inventory-turnover\" data-level=\"2\">How to increase inventory turnover<\/a><\/li><li><a href=\"#h-final-thoughts\" data-level=\"2\">Final thoughts<\/a><\/li><\/ul><\/div>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-how-to-calculate-inventory-turnover-ratio\">How to calculate inventory turnover ratio<\/h2>\n\n\n\n<p>The formula for the inventory turnover ratio is simply COGS\/average inventory.&nbsp;<\/p>\n\n\n\n<p>So, the basic steps for calculating the inventory turnover ratio are:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Determine COGS<\/strong>: sum the cost of all goods sold during the period<\/li>\n\n\n\n<li><strong>Calculate average inventory<\/strong>: add the beginning and ending inventory values then divide by two<\/li>\n\n\n\n<li><strong>Apply the formula<\/strong>: divide COGS by average inventory<\/li>\n<\/ul>\n\n\n\n<p>Here\u2019s a quick example:<\/p>\n\n\n\n<p><strong>COGS<\/strong>: $500,000<\/p>\n\n\n\n<p><strong>Beginning inventory<\/strong>: $100,000<\/p>\n\n\n\n<p><strong>Ending inventory<\/strong>: $150,000<\/p>\n\n\n\n<p><strong>Average inventory<\/strong>: ($100,000 + $150,000) \/ 2 = $125,000<\/p>\n\n\n\n<p><strong>Inventory turnover ratio<\/strong> = $500,000\/$125,000 = 4 times<\/p>\n\n\n\n<p>This means the average investment in inventory was sold and replenished (turned over) four times during the period.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-what-is-inventory-turnover\">What is inventory turnover?<\/h2>\n\n\n\n<p><a href=\"https:\/\/www.sage.com\/en-us\/blog\/what-is-inventory-turnover\/\" target=\"_blank\" rel=\"noreferrer noopener\"><strong>Inventory turnover<\/strong><\/a> is a measure of how frequently a company completes the cycle of selling and replacing its stock of goods over a certain period.<\/p>\n\n\n\n<p>For example, if you sell your entire inventory 35 times during a 52-week period, your inventory turnover for the year is 35.<\/p>\n\n\n\n<p>A lower inventory turnover of, say, 16 in one year means you\u2019re selling much less stock in the same period. Inventory turnover therefore indicates how efficient your business is in managing its inventory.<\/p>\n\n\n\n<p>High inventory turnover rates typically mean strong sales, whereas low turnover rates can indicate overstocking or inefficiencies in the sales process.<\/p>\n\n\n\n<p>Keeping an eye on your monthly turnover and your annual turnover helps you identify trends in your business. <\/p>\n\n\n\n<p>For example, monthly monitoring will enable you to see short-term trends, seasonal variations, and any unexpected issues. <\/p>\n\n\n\n<p>This helps you make urgent adjustments before stock discrepancies get out of hand.<\/p>\n\n\n\n<p>Annual monitoring of inventory turnover is a great way to evaluate long-term performance. <\/p>\n\n\n\n<p>It lets you assess the effectiveness of your inventory management strategies and make informed decisions while planning for the future.<\/p>\n\n\n\n<p>Together, monthly and annual monitoring of inventory turnover provide a comprehensive picture of your inventory efficiency and overall business health.<\/p>\n\n\n\n<p><a href=\"https:\/\/www.sage.com\/en-us\/inventory-management\/\" target=\"_blank\" rel=\"noreferrer noopener\"><strong>Inventory management software<\/strong><\/a> is a fantastic tool for effectively monitoring your inventory turnover on a monthly and annual basis, allowing you to quickly judge how well your stock is moving.<\/p>\n\n\n\n<p>Comprehensive inventory management features that can automate tracking and provide real-time insights into your inventory turnover can help you maintain accurate records, forecast demand, and set optimal reorder points.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-what-is-inventory-turnover-ratio\">What is inventory turnover ratio?<\/h2>\n\n\n\n<p>The inventory turnover ratio provides a <em>financial<\/em> measure of inventory management efficiency, reflecting how effectively a company converts its inventory investment\u2014<a href=\"https:\/\/www.sage.com\/en-us\/blog\/glossary\/cost-goods-sold-cogs\/\" target=\"_blank\" rel=\"noreferrer noopener\"><strong>cost of goods sold (COGS)<\/strong><\/a>\u2014into sales.&nbsp;<\/p>\n\n\n\n<p>This ratio indicates how many times <em>the value of the average inventory<\/em> is sold and replaced during the period. <\/p>\n\n\n\n<p>The number is written with the word \u2018times\u2019 to make it clear the ratio represents a frequency.<\/p>\n\n\n\n<p>In addition to monitoring the inventory turnover ratio for the short- and long-term, it\u2019s important to compare the ratio to industry benchmarks.&nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-what-does-the-inventory-turnover-ratio-tell-you\">What does the inventory turnover ratio tell you?<\/h2>\n\n\n\n<p>While inventory turnover provides a general understanding of how quickly you\u2019ve sold and replaced your stock, the inventory turnover ratio offers a more quantifiable measure of efficiency. <\/p>\n\n\n\n<p>This allows for more precise comparisons over time and <a href=\"https:\/\/business.feefo.com\/en-us\/resources\/business-insights\/industry-benchmarking\" target=\"_blank\" rel=\"noreferrer noopener\"><strong>with industry benchmarks<\/strong><\/a>.&nbsp;<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>A high ratio indicates efficient inventory management in terms of both value and volume. Combine with other profitability metrics, such as gross profit margin, to provide a more comprehensive view of a company&#8217;s financial health.&nbsp;<\/li>\n\n\n\n<li>Generally, <a href=\"https:\/\/www.sage.com\/en-us\/blog\/cash-flow-management-tips-businesses\/\" target=\"_blank\" rel=\"noreferrer noopener\"><strong>cash flow<\/strong><\/a> is improved when inventory turnover is higher because cash is coming into the business at a higher rate while inventory is being sold.<\/li>\n\n\n\n<li>If inventory turnover is low, storage costs will increase because you need to find storage for the inventory that hasn\u2019t sold.<\/li>\n\n\n\n<li>The longer it takes inventory to sell, the greater the risk that it will become obsolete and never sell. And finally, efficient inventory management ensures products are available when customers need them, improving service levels and customer satisfaction.<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-what-is-a-good-inventory-turnover-ratio\">What is a good inventory turnover ratio?<\/h2>\n\n\n\n<p>The ideal inventory turnover ratio depends on various factors, including industry norms, business models, and product types. <\/p>\n\n\n\n<p>Try to strike a balance between keeping a high inventory turnover ratio without suffering anomalies like stockouts.<\/p>\n\n\n\n<p>Generally, a balanced turnover ratio, as determined by comparing your case to industry benchmarks and company historical data, indicates good inventory management without overstocking or frequent stockouts.<\/p>\n\n\n\n<p>Overstocking can lead to excess carrying costs, such as storage fees, insurance, and potential obsolescence.<\/p>\n\n\n\n<p>On the other hand, frequent <a href=\"https:\/\/www.accountingtools.com\/articles\/stockout\" target=\"_blank\" rel=\"noreferrer noopener\"><strong>stockouts<\/strong><\/a> can result in lost sales, customer dissatisfaction, and damage to brand reputation.<\/p>\n\n\n\n<p>Industries with fast-moving consumer goods, such as groceries or electronics, typically have higher turnover ratios compared to industries with specialized or customized products that require longer lead times (such as jewelry or automobiles).<\/p>\n\n\n\n<p>Similarly, businesses with a <a href=\"https:\/\/www.sage.com\/en-us\/blog\/what-is-just-in-time-inventory\/\" target=\"_blank\" rel=\"noreferrer noopener\"><strong>just-in-time inventory<\/strong><\/a> strategy, where they hold minimal inventory and rely on frequent deliveries, tend to have higher turnover ratios than those with a more traditional warehousing approach.<\/p>\n\n\n\n<p>Several factors influence the ideal inventory turnover ratio.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-industry-characteristics\">Industry characteristics<\/h3>\n\n\n\n<p>Different industries have different benchmarks for inventory turnover ratios based on their unique operating criteria. <\/p>\n\n\n\n<p>Everything from supply chain and logistics setup to average transaction value can make a difference. <\/p>\n\n\n\n<p>For example, industries with longer lead times for ordering and receiving inventory may naturally have lower turnover ratios. <\/p>\n\n\n\n<p>On the other hand, industries with high-value items (like luxury cars) tend to have lower turnover norms compared to industries with low-value, frequently purchased items.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-business-model\">Business model<\/h3>\n\n\n\n<p>The business model of a company also impacts its ideal inventory turnover ratio. <\/p>\n\n\n\n<p>E-commerce businesses, which often operate with limited physical storage space, tend to have higher turnover ratios than brick-and-mortar stores, which typically have large warehouses.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-product-type\">Product type<\/h3>\n\n\n\n<p>The type of product can also affect the ideal inventory turnover ratio. <\/p>\n\n\n\n<p>Products with a short shelf life or that are subject to rapid technological advancements may require higher turnover ratios to minimize the risk of obsolescence.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-inventory-turnover-ratio-in-action\">Inventory turnover ratio in action<\/h2>\n\n\n\n<p>For a closer look at the effect of the turnover ratio, meet \u201cGreen Thumb Gardening Supplies\u201d. <\/p>\n\n\n\n<p>They sell gardening tools and equipment, and here\u2019s their inventory turnover calculation for the year:<\/p>\n\n\n\n<p><strong>COGS<\/strong>: $400,000<\/p>\n\n\n\n<p><strong>Beginning inventory<\/strong>: $50,000<\/p>\n\n\n\n<p><strong>Ending inventory<\/strong>: $70,000<\/p>\n\n\n\n<p><strong>Average inventory<\/strong>: $120,000\/2 = $60,000&nbsp;<\/p>\n\n\n\n<p><strong>Inventory turnover ratio<\/strong>: $400,000\/$60,000 = 6.67 times.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-what-does-this-mean-for-green-thumb-gardening-supplies-nbsp\">What does this mean for Green Thumb Gardening supplies?&nbsp;<\/h2>\n\n\n\n<p>A great starting point is to take a look at the inventory turnover industry benchmark for gardening supply stores. <\/p>\n\n\n\n<p>That comparison to the industry standard will tell Green Thumb whether they are performing as well as their peers in gardening supplies.<\/p>\n\n\n\n<p>Another useful comparison is historical data. <\/p>\n\n\n\n<p>If Green Thumb has been in business for several years, they can track inventory turnover results across each period.<\/p>\n\n\n\n<p>For example, if their inventory turnover ratio was 9.5 in the previous year, and is now 6.67, they will want to investigate why the metric has dropped. <\/p>\n\n\n\n<p>Possible explanations could include stocking new items customers weren\u2019t interested in, decreased marketing efforts, or poor weather during peak gardening season.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-what-does-a-low-inventory-turnover-ratio-mean\">What does a low inventory turnover ratio mean?<\/h2>\n\n\n\n<p>Remember, a higher turnover ratio points to better inventory efficiency, so it\u2019s lower inventory turnover rates that should prompt management to investigate further.<\/p>\n\n\n\n<p>Because the inventory turnover ratio considers COGS and average inventory during the period examined, it makes sense to take a look at sales and stock when considering reasons for a lower inventory turnover ratio.<\/p>\n\n\n\n<p>Reasons for a low inventory turnover ratio could include:<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Overstocking<\/h3>\n\n\n\n<p>Holding too much inventory that is not being sold quickly, leading to excess stock.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Poor sales performance<\/h3>\n\n\n\n<p>This could be due to a weak demand due to ineffective marketing, pricing issues, or poor quality products.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Inefficient inventory management<\/h3>\n\n\n\n<p>Lack of proper inventory control systems or poor product forecasting, resulting in excess inventory.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Seasonal products<\/h3>\n\n\n\n<p>Stocking seasonal items which don\u2019t sell until the appropriate season arrives.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Obsolete inventory<\/h3>\n\n\n\n<p>Attempting to sell outdated products which no longer appeal to customers.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Supply chain issues<\/h3>\n\n\n\n<p>Delays in product delivery\u2014due to congestion at ports, for example\u2014can lead to lower inventory levels and potential stockouts.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Poor product mix<\/h3>\n\n\n\n<p>Stocking products that don\u2019t align with current market demand or customer preferences.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Economic conditions<\/h3>\n\n\n\n<p>Economic downturns can reduce consumer spending, leading to slower inventory turnover.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">High prices<\/h3>\n\n\n\n<p>Pricing products too high compared to competitors can lead to reduced sales and slower inventory turnover.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">New product introduction<\/h3>\n\n\n\n<p>Introducing new products can sometimes result in older products not selling as quickly.<\/p>\n\n\n\n<p>Only when you\u2019ve identified the cause of low inventory turnover can you think about strategies to improve inventory management. <\/p>\n\n\n\n<p>These could include enhanced marketing efforts, or research to better align product offerings with what customers want.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-is-high-inventory-turnover-good\">Is high inventory turnover good?<\/h2>\n\n\n\n<p>On the whole, yes. A high inventory turnover ratio is beneficial because it can reduce storage costs and the risk of inventory becoming obsolete. <\/p>\n\n\n\n<p>It also indicates strong demand for your products, and that you have effective inventory management strategies in place.<\/p>\n\n\n\n<p>Sometimes the only difference between two businesses in the same industry with different inventory turnover rates is the strength and success of their respective marketing campaigns.<\/p>\n\n\n\n<p>Market competitiveness also allows businesses to adapt quickly to market changes, such as fluctuations in demand.<\/p>\n\n\n\n<p>However, excessively high turnover can lead to stockouts, missed sales opportunities, and frustrated customers. <\/p>\n\n\n\n<p>The key is to find the sweet spot that maximizes efficiency without compromising customer satisfaction<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-how-to-increase-inventory-turnover\">How to increase inventory turnover<\/h2>\n\n\n\n<p>So, assuming you don\u2019t get carried away, and there is obvious benefit to increasing your inventory turnover, what strategies can you employ?<\/p>\n\n\n\n<p>It probably requires a multi-faceted approach, so here are several ideas:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Keep limited inventory or use a model such as <a href=\"https:\/\/www.sage.com\/en-us\/blog\/what-is-just-in-time-inventory\/\" target=\"_blank\" rel=\"noreferrer noopener\"><strong>just in time inventory management<\/strong><\/a>.<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Maintain strong supplier relationships so you can restock frequently with shorter lead times.<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Improve your sales and marketing efforts. For example, look into targeted marketing campaigns to reach potential customers and increase product awareness.<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Analyze sales data and identify trends so you can better understand customer preferences and adjust inventory accordingly.<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Optimize inventory management processes by implementing efficient inventory tracking systems, using forecasting techniques to determine optimal stock levels, and working with suppliers to reduce lead times.<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Perform regular inventory audits to identify slow-moving or obsolete items that can be cleared out to free up cash and storage space.&nbsp;<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-final-thoughts\">Final thoughts<\/h2>\n\n\n\n<p>Implementing robust inventory management practices, leveraging technology, and staying agile in response to market trends will help you maintain an optimal inventory turnover ratio, ultimately supporting your business&#8217;s growth and stability.<\/p>\n\n\n\n<p>To learn more about how the right software combined with automation and AI tools can help you manage inventory and other financial aspects of running a business, subscribe to <strong>Sage Advice Newsletter<\/strong>.<\/p>\n\n\n\n<p>It\u2019s the perfect source for expert tips, industry insights, and the latest updates on accounting and business management solutions.<\/p>\n\n\n<div class=\"single-cta\">\n\t<div class=\"single-cta__positioner\">\n\t\t<div class=\"single-cta__wrapper has-dark-background-color\">\n\t\t\t<div class=\"single-cta__content\">\n\t\t\t\t\t\t\t\t<h2 class=\"single-cta__title h3\">Subscribe to our Sage Advice Newsletter<\/h2>\n\n\t\t\t\t\t\t\t\t\t<div class=\"single-cta__description\">\n\t\t\t\t\t\t<p>Get our latest business advice delivered directly to your inbox.<\/p>\n\t\t\t\t\t<\/div>\n\t\t\t\t\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t<a\n\t\t\t\t\t\thref=\"#gate-ab515c6e-7e90-4c2f-a67e-113872516e8b\"\n\t\t\t\t\t\tclass=\"single-cta__button button button--primary\"\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t>Subscribe<\/a>\n\t\t\t\t\t\t\t<\/div>\n\n\t\t\t\t\t<\/div>\n\n\t\t\t\t\t<img decoding=\"async\" width=\"1440\" height=\"810\" src=\"https:\/\/www.sage.com\/en-us\/blog\/wp-content\/uploads\/sites\/2\/2022\/04\/GettyImages-1073797282-1440x810.jpg\" class=\"single-cta__image\" alt=\"Working from home with tea in hand\" loading=\"lazy\" srcset=\"https:\/\/www.sage.com\/en-us\/blog\/wp-content\/uploads\/sites\/2\/2022\/04\/GettyImages-1073797282-1440x810.jpg 1440w\" sizes=\"auto, (min-width: 48em) 33vw, 100vw\" \/>\t\t\t<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>Every business owner knows the importance of tracking inventory. But did you know there&#8217;s a key metric that translates stock flow into financial data? Learn all about the inventory turnover ratio and how it can help you optimize your business. <\/p>\n","protected":false},"author":1739,"featured_media":9289,"menu_order":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_sage_video":false,"post_featured_image_hide":false,"sage_hide_published_date":false,"sage_hide_read_time":false,"sage_hide_share_buttons":false,"footnotes":""},"categories":[44,49],"tags":[13],"business_type":[],"lilypad":[],"context":[],"industry":[],"persona":[98,96,97],"imagine_tag":[463,233,230,237],"coauthors":[618],"class_list":["post-24818","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-strategy-legal-operations","category-trends-insights","tag-erp"],"sage_meta":{"region":"en-us","author_name":"Michelle Cornish","featured_image":"https:\/\/www.sage.com\/en-us\/blog\/wp-content\/uploads\/sites\/2\/2022\/04\/GettyImages-1178687924.jpg","imagine_tags":{"463":"ERP","233":"Medium Businesses","230":"Small business","237":"Supply Chain Management"}},"distributor_meta":false,"distributor_terms":false,"distributor_media":false,"distributor_original_site_name":"Sage Advice US","distributor_original_site_url":"https:\/\/www.sage.com\/en-us\/blog","push-errors":false,"_links":{"self":[{"href":"https:\/\/www.sage.com\/en-us\/blog\/api\/wp\/v2\/posts\/24818","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.sage.com\/en-us\/blog\/api\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.sage.com\/en-us\/blog\/api\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.sage.com\/en-us\/blog\/api\/wp\/v2\/users\/1739"}],"replies":[{"embeddable":true,"href":"https:\/\/www.sage.com\/en-us\/blog\/api\/wp\/v2\/comments?post=24818"}],"version-history":[{"count":0,"href":"https:\/\/www.sage.com\/en-us\/blog\/api\/wp\/v2\/posts\/24818\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.sage.com\/en-us\/blog\/api\/wp\/v2\/media\/9289"}],"wp:attachment":[{"href":"https:\/\/www.sage.com\/en-us\/blog\/api\/wp\/v2\/media?parent=24818"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.sage.com\/en-us\/blog\/api\/wp\/v2\/categories?post=24818"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.sage.com\/en-us\/blog\/api\/wp\/v2\/tags?post=24818"},{"taxonomy":"business_type","embeddable":true,"href":"https:\/\/www.sage.com\/en-us\/blog\/api\/wp\/v2\/business_type?post=24818"},{"taxonomy":"lilypad","embeddable":true,"href":"https:\/\/www.sage.com\/en-us\/blog\/api\/wp\/v2\/lilypad?post=24818"},{"taxonomy":"context","embeddable":true,"href":"https:\/\/www.sage.com\/en-us\/blog\/api\/wp\/v2\/context?post=24818"},{"taxonomy":"industry","embeddable":true,"href":"https:\/\/www.sage.com\/en-us\/blog\/api\/wp\/v2\/industry?post=24818"},{"taxonomy":"persona","embeddable":true,"href":"https:\/\/www.sage.com\/en-us\/blog\/api\/wp\/v2\/persona?post=24818"},{"taxonomy":"imagine_tag","embeddable":true,"href":"https:\/\/www.sage.com\/en-us\/blog\/api\/wp\/v2\/imagine_tag?post=24818"},{"taxonomy":"author","embeddable":true,"href":"https:\/\/www.sage.com\/en-us\/blog\/api\/wp\/v2\/coauthors?post=24818"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}