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Answer Posted / manish kumar dahinwal
A measure of the number of times a company's inventory is
replaced during a given time period. Turnover ratio is
calculated as cost of goods sold divided by average
inventory during the time period. A high turnover ratio is
a sign that the company is producing and selling its goods
or services very quickly.
Thus turnover is the measure of the profit making of the
company and the unit by which we can come to know what we
had in the beginning of the financial year and what we have
at the time of closing of the books of accounts,in monetary
terms.
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