![]() On the other hand, a company that doesn't carry sufficient stock might have a high turnover ratio while leaving money on the table in the form of lost sales. High turnover ratios can indicate strong sales numbers or a company that manages its inventory efficiently. Typically, a high inventory ratio is a good thing for companies. The higher the turnover ratio, the less time it takes for the company sells through its inventory. It comes with utter necessity for a company to highlight this matter for the future prosperity of it.Inventory turnover measures a company's ability to sell through all of its inventory. Furthermore, the products are held by the company for so long, which determines that the product is not demanded by consumers as what’s expected by producers. When there is a decrease in inventory, it means that the cash is not converted as quickly as possible.
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