Measure how quickly gold inventory turns into sales during a period. This version reports turnover, approximate inventory days and annualized velocity rather than just a single ratio.
Gold inventory can tie up substantial capital. Turnover helps show how rapidly inventory is being converted through sales under the chosen accounting period.
If inventory is valued at acquisition cost, COGS should be measured on the same basis. Mixing market-value inventory with cost-based COGS can make the ratio difficult to interpret.
COGS divided by average inventory.
Inventory cycles through the business more frequently.
Approximate days inventory remains on hand.
Use a consistent accounting basis.