Rate of Stock Turnover
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Analysis and Interpretation of Financial Statements for Decision Making
MS: Kadar Pusing Ganti Stok · EN: Rate of Stock Turnover · ZH: 存货周转率
Meaning
The rate of stock turnover measures how many times stock is sold and replaced during a period. Its formula is cost of sales ÷ average stock. A high rate shows that stock moves quickly and sales are efficient.
Example
Ilmu Bookstore has cost of sales of RM120,000 and average stock of RM20,000. The rate of stock turnover is 120,000 ÷ 20,000 = 6 times a year, meaning stock is replaced six times in a year.
Source: DSKP KSSM Prinsip Perakaunan Tingkatan 5