Inventory Turnover
Short definition
Inventory turnover is how many times inventory is sold as COGS in a year. It is the inverse of DIO: turns = 365 / DIO. Higher turns tie less cash and can hide stock-outs.
Detailed explanation
The denominator is COGS; dividing by sales injects margin. Season and lot size distort annual turns; quarterly turns can be more honest.
Rising turns release cash or mean stock-outs. Dead SKUs can keep average turns high while cash and NRV deteriorate.
Why it matters for the CFO
It is a buying and production KPI. Without a service-level target it becomes a cash game.
How it is calculated
Stok devir hızı = COGS / Ortalama stok (= 365 / DIO)
Variables in the formula
- Turns: COGS / average inventory
How to read it
Turns of 3.7× imply DIO ≈ 99 days. Sector and lead time set “good”; there is no universal target.
Numerical example
COGS 260 mn TL, average inventory 70 mn TL → turns = 260 / 70 ≈ 3.7×. DIO ≈ 365 / 3.7 ≈ 99 days.
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Definitions are educational. They are not investment, credit or tax advice.