Aqid ERPMeaning
Inventory turnover (معدل دوران المخزون) measures how fast stock moves. The formula is the cost of goods sold for the period divided by the average inventory, usually the opening and closing balances added and halved. Dividing 365 by the turnover gives the days inventory is held on average, the figure most managers find easier to picture.
A higher turnover means less cash tied up on shelves and less risk of stock going out of date; a lower one points to slow lines, over-ordering or prices set too high. What counts as good depends on the trade: a grocery may turn its stock twenty times a year, a spare-parts dealer three or four. The figure is only as reliable as the inventory value behind it, which is why periodic stock counts matter.
Also called: stock turnover · inventory turnover ratio · days inventory outstanding · معدل دوران المخزون
Example
A building-materials shop's cost of sales for 2026 is 1,800,000.00. Its stock was 280,000.00 on 1 January and 320,000.00 on 31 December, an average of 300,000.00. Inventory turnover is 6 (1,800,000.00 ÷ 300,000.00), so stock is held about 61 days on average (365 ÷ 6).