![]() ![]() ![]() Knowing these numbers is important because they can have a massive influence on your profit margins. Generally speaking, a higher inventory turnover (but a lower inventory turnover period) is preferable, but this can vary from one industry to another. The DII value shows the average number of days it takes to sell a particular set of current inventory. Knowing and understanding your company’s inventory turnover rate can be a massive help in planning your future inventory purchases and optimising your stock.Ĭalculating your business’ days in inventory* (DII) can help you to understand your inventory turnover ratio even better because it positions the ratio within daily context. The ratio indicates how many times particular inventory is sold during a certain period of time – over the course of a year, for example. Inventory turnover ratio is probably one of the best indicators of a company’s efficiency – in essence, showing how quick your business is at turning inventory into sales. The Importance of Inventory Turnover Ratio ![]()
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