of
             6 means that the company's average level of inventory has been sold six
             times during the year. This is generally better than a turnover of 3 or 4.
             However, a high value can mean that the business is not keeping enough
             inventory on hand, and inadequate inventory can result in lost sales if the
             company cannot fill a customer's order. Therefore, a business strives for
             the most profitable rate of inventory turnover, not necessarily the highest
             To compute the inventory turnover ratio, we divide cost of goods sold by the
             average inventory for the period. We use the cost of goods sold-not sales-in
             the computation because both cost of goods sold and inventory are stated at
             cost. Sales are stated at the sales value of inventory and therefore are not
             ACCOUNTS RECEIVABLE TURNOVER. Accounts receivable tu
             ...