Moreover, sectors that stock more expensive items-where buyers typically take longer to make a purchase decision-would have lower inventory turnovers. As a general rule, companies that store relatively affordable products will have greater inventory turnovers. What constitutes a “good” inventory turnover will vary depending on the industry. Interpretation of Inventory Turnover Ratio Good Inventory Turnover The latter may result in a business loss. When the ratio is high, it indicates that sales are robust or that inventory is low. The items given or inadequate marketing could be the cause of such a predicament.
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