Month End Glossary

Turnover Ratio

The turnover ratio refers to the ratio at which assets or resources are turned over or utilized efficiently to generate sales or other relevant performance metrics.

The turnover ratio is a financial metric used to measure the efficiency and effectiveness with which a company uses its assets and resources to generate revenues or sales. For example, the inventory turnover ratio indicates how many times the stock or inventory is sold and replaced over a specific period. A higher turnover ratio generally reflects better performance since it shows that assets are being used productively and not lying idle.

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