• The inventory or stock turnover ratio is also called the stock velocity ratio.
• Stock turnover ratio is also known as inventory ratio or inventory turnover ratio or stock turn ratio or merchandise turnover ratio or stock velocity ratio or simply velocity of stock.
• This ratio measures the number of times the stock turns, flows, or rotates in an accounting period compared to the sales affected during that period.
• It indicates the frequency of inventory replacement, i.e. the number of times the inventory has been sold and replaced during a given period of time.

The stock turnover ratio is the relationship between the inventory and the cost of goods sold and is calculated as

Stock Turnover Ratio = Cost of Goods Sold/Average Stock