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What Is Inventory Turns or Inventory Turnover?

Inventory turnover refers to the number of times inventory has been sold or used then replaced in a specified amount of time. A higher inventory turnover rate means that a company's capital is being used and less capital is required due to the profit of inventory being sold. It also helps to maintain price stability since a company does not need to host sales in order to get rid of excess inventory. Instead, it allows for products to be sold at a steadier price.