Stock Turnover is a financial metric that measures how efficiently a company manages its inventory. It indicates how many times a company's inventory is sold and replaced over a specific period, usually a year. A higher stock turnover ratio suggests that a company is selling its products quickly, which can be a sign of strong demand and effective inventory management. To calculate stock turnover, divide the cost of goods sold (COGS) by the average inventory during the same period. This ratio helps businesses assess their sales performance and inventory management strategies, ultimately guiding decisions on purchasing and production.