turnover ratio
Definitions (2)
1. A measure of the number of times a company's inventory is replaced during a given time period. Turnover ratio is calculated as cost of goods sold divided by average inventory during the time period. A high turnover ratio is a sign that the company is producing and selling its goods or services very quickly.
2. In the case of mutual funds, the percentage of a fund's assets that have changed over the course of a given time period, usually a year. Turnover ratio for a mutual fund is calculated by dividing the average assets during the period by the lesser of the value of purchases and the value of sales during the same period. Mutual funds with higher turnover ratios tend to have higher expenses.
Use turnover ratio in a sentence
“ Our turnover ratio was really high and I was a bit worried about it and how it impacted the rest of our company. ”
“ ABC Corp. hired a new inventory and sales manager to specifically look at the efficiency of the company's operations and its turnover ratio. ”
“ ABC Company was pleased to discover that their new marketing and sales campaign caused them to have a higher than normal turnover ratio for their products. ”
