Stock Turnover

A measure relating stock to turnover (as an indicator of the level of trading activity) to monitor the control of stock within working capital.

Turnover (Sales)	=	725.8	=	5.6 times
Stock		129.1

We would prefer to be able to relate stock to purchases (raw materials) or cost of sales (finished goods) rather than sales value, since the selling price is a poor indicator of the raw materials cost, the value of part finished products, and the value of finished goods. But this is not disclosed on all published accounts. As a measure to monitor trends in relation to overall activity a sales based measure is adequate.