Stock Turnover Period Example

Stock Turnover Period Example

Stock turnover period is calculated to determine that how company sales department is performing. in other words shows that how many time stock shall take to be sold. This concept can be explained with an example;

Stock Turnover Period =     Average Inventory     x 365

                                             Cost of Sales

Example

Stock or average stock of the company= 18,000

Cost of Sales of the company = 80,000

Calculate the number of days in which stock shall be sold?

Solution

Stock Turnover Period =     Inventory or Average Inventory     x 365

                                                   Cost of Sales

= (18,000/80,000) x 365

= 82.125 Days

Company shall take 82 days for selling its stock.