Name: Inventory Turnover

Definition: Inventory turnover measures how quickly the company sells and replaces its inventory. A higher turnover means products are selling fast and inventory isn’t sitting idle. Slow turnover may suggest weak sales, poor demand forecasting, or obsolete inventory piling up — all of which can tie up cash unnecessarily.

Interpretation:
• In '2021', RDGT's inventory turnover was 6.12, reflecting efficiency in managing inventory stock. Industry average for Retail-Drug Stores and Proprietary Stores in '2021' stood at 6.25.
• In '2022', RDGT's inventory turnover was 7.75, reflecting efficiency in managing inventory stock. The increase since '2021' reflects strengthening financial performance. Industry average for Retail-Drug Stores and Proprietary Stores in '2022' stood at 7.76. Industry average increased by 1.51 compared to previous year.
• In '2023', RDGT's inventory turnover was 7.31, reflecting efficiency in managing inventory stock. The decline from '2022' may indicate some operational or financial challenges. Industry average for Retail-Drug Stores and Proprietary Stores in '2023' stood at 8.06. Industry average increased by 0.31 compared to previous year.
• In '2024', RDGT's inventory turnover was 7.82, reflecting efficiency in managing inventory stock. The increase since '2023' reflects strengthening financial performance. Industry average for Retail-Drug Stores and Proprietary Stores in '2024' stood at 8.67. Industry average increased by 0.60 compared to previous year.
Overall, RDGT's inventory turnover has steadily improved over the past 4 years.

Formula: Inventory Turnover = Cost of Goods Sold / Average Inventory

Good Range: Typically 4 to 12 depending on industry.