Definition
Turnover divides COGS by average inventory, revealing capital efficiency in physical retail. High turnover means cash cycles quickly; low turnover means margins funding warehouses instead of growth.
Why it matters
Marketing amplifies whatever inventory allows - promoting dead stock wastes demand while starving winners of budget.
Formula
Cost of goods sold / Average inventory value
Benchmarks
Fashion 4-6x annually; grocery far higher; luxury intentionally lower
All glossary terms