inventory to cost of sales ratio |
|
Definition
Percentage of cost of sales attributable to average inventory. A decreasing number indicates higher efficiency in use of resources; an increasing number suggests potential cash flow problems due to greater sums tied up in inventory. Formula: (Average inventory during a period ÷ cost of sales during that period) x 100.
email to a friend
print this definition
cite this definition
link to this page
inventory to cost of sales ratio is in the Accounting & Auditing, Banking, Commerce & Finance and Inventory Control & Storage subjects.
inventory to cost of sales ratio appears in the definition of the following term: inventory to cost-of-goods sold (COGS) ratio
This content can be found on the following page:
http://www.businessdictionary.com/definition/inventory-to-cost-of-sales-ratio.html