You can find more about calculating the inventory turnover ratio in this AAII Journal article.
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The inventory turnover ratio should be particularly interesting to pay attention to when the majority of retailers report quarterly results in February.
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It is also useful to look at the inventory turnover ratio.
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According to the companys Q3 2010 10-Q and 2009 10-K form, the Inventory turnover has been maintained at around 12 for the last few years.
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The demand for fast-paced inventory turnover keeps many stores from undertaking a comprehensive plan to maximize the value of returns, opting instead to get back something while making way for new merchandise.
Taking this a step further, you can determine the number of days it takes to completely turn over inventory by dividing the number of days in a period by the inventory turnover ratio.
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Inventory turnover is one of the classic measures of retailing success: The higher the number, the better, since that means the retailer is getting more mileage out of the assets it has tied up on its shelves.
Investors mulling retail stocks have well-established metrics to look at, among them inventory turnover (cost of sales divided by inventory), same-store-sales growth (the change in sales for stores open at least one year) and sales per square foot.
Costco Wholesale Corp. operates membership warehouses based on the concept that offering members very low prices on a limited selection of nationally branded and selected private label products in a wide range of merchandise categories will produce high sales volumes and rapid inventory turnover.
Abdullahi rejected any implication, though, that the new business strategy reflected a need to increase turnover and reduce inventory costs in order to pay al Shabaab its cut.
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