stock turnover

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The number of times in a year that the stock-in-trade of an organization is deemed to have been sold. This is best found by dividing the total cost of the goods sold in a year by an average value of the stock-in-trade (see rate of turnover). The faster the stock is turned over, the more opportunities there are to make profits on it and therefore the lower the margins that are required; for example a supermarket, in which the stock is turned over frequently, makes lower margins than a jeweller's shop, in which high-priced goods are sold infrequently.

Subjects: Business and Management.

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