Stock turn = sales ÷ closing stock
Sales is the revenue from selling goods and services (as explained in Chapter 4).
Stock is the value of goods held for sale at the end of the accounting period (as explained in Chapter 6).
Stock turn is a measure of business efficiency. The number indicates how many times the company sells a stock item during the course of an accounting period. This is sometimes expressed in the form of stock days (explained below). The higher the number, the more efficient is the business.
Suppose a company has sales of £100 million and closing stock of £10 million; its stock turn is 10. This means that, on average, the company will buy ...