Average stock to sales ratio
Inventory to Sales Ratio Formula 1. Inventory to Sales Ratio = Average Inventory / Net Sales. To calculate this ratio, we simply divide the inventory by the total net In accounting, the Inventory turnover is a measure of the number of times inventory is sold or used in a time period such as a year. It is calculated to see if a business has an excessive inventory in comparison to its sales level. The equation for inventory turnover equals the cost of goods sold divided by the average inventory. Cost of sales yields a more realistic turnover ratio, but it is often necessary to We penalise companies with a high and/or rising level of inventory relative industry we have used two ratios: inventories as a percentage of sales and of cost of level of inventory with a median average of 158% between 2010 and 2015.