Inventory turnover is a financial metric that measures how many times a company's inventory is sold and replaced over a specific period, typically a year. It indicates the efficiency of inventory management and how well a company is converting its inventory into sales. Calculation : The formula for calculating inventory turnover is: Inventory Turnover = Cost of Goods Sold (COGS) / Average Inventory

Consigned inventory is the goods which a retailer or a third party sells for an owner, and ownership of these goods shall not pass until all items are sold. Possible liability for stock held remains with the original owner till the point of sale which implies that, till the stock is sold, they are the ones bearing the cost of inventory. This system enables retailers to carry certain products without any cash outlay upfront and the proprietor gets more exposure and sales.