The stock turnover ratio, also known as inventory turnover ratio, is a financial metric that measures how efficiently a company manages its inventory or stock. It indicates how many times the company's inventory is sold and replaced over a specific period, generally a year. The formula for calculating the stock turnover ratio is as follows: Stock Turnover Ratio = Cost of Goods Sold (COGS) / Average Inventory Where: COGS = Cost of Goods Sold during a specific period (usually a year) Average Inventory = Average value of inventory during the same period