Inventory-To-Sales Ratio

The Inventory-To-Sales Ratio is a ratio obtained by dividing inventories by net sales for the quarter. It is expressed as a percentage of inventory to net sales. Please note that the ratios are based on total inventories on hand at the end of each quarter and the net sales for that quarter. Example: Inventory Value = 99,500 Sales for the quarter = 314,500 31.64% = Inventory-to-sales ratio expressed as a percentage of inventory to sales for the quarter. 7.91% = Annual basis (31.64% divided by 4). 12.64 turns = Inventory turn-over rate (100 divided by 7.91%).

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