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What is Inventory Turnover Ratio (ITR)

Chapter 1
Handbook of Research on Strategic Business Infrastructure Development and Contemporary Issues in Finance
A measure of the efficiency of inventory management of the company. In general, a high ITR is good from the liquidity point of view and implies sound inventory management, whereas a low ratio signifies excessive inventory levels than warranted by the volume of operation indicating poor liquidity as well as inefficiency in the inventory management.
Published in Chapter:
Working Capital Management in Select Indian Pharmaceutical Companies: A Cross-Sectional Analysis
Debasish Sur (University of Burdwan, India), Sumit Kumar Maji (University of Burdwan, India), and Deep Banerjee (University of Burdwan, India)
Copyright: © 2014 |Pages: 11
DOI: 10.4018/978-1-4666-5154-8.ch001
Abstract
The Indian pharmaceutical industry is the fifth largest pharmaceutical industry in the world in terms of volume and the fourteenth largest in value terms. There have been sevaral notable changes in the scenario of Indian pharmaceutical industry after the signing of GATT (now WTO). The mergers, acquisitions, and takeovers at both national and international levels have become a common phenomenon in this industry. In today's challenging and competitive environment, efficient management of working capital is an integral component of the overall strategy to create shareholders' wealth. So, the task of designing appropriate strategies for managing working capital in accomplishing the objective of maximizing shareholders' wealth of companies in the Indian pharmaceutical industry is of prime importance. In this backdrop, the chapter seeks to analyze the working capital management of ten selected companies in the Indian pharmaceutical industry during the period 1996-97 to 2010-11. While satisfying the objective of the study, relevant statistical tools and techniques have been applied at appropriate places.
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Chapter 12
Working Capital Management: A Study Based on Cipla Ltd.
The ratio between cost of goods sold to average inventory. It measures the efficiency of the inventory management. The higher the ratio, the more efficient of the management of inventories and vice-versa.
Published in Chapter: Working Capital Management: A Study Based on Cipla Ltd.; From: Handbook of Research on Strategic Business Infrastructure Development and Contemporary Issues in Finance
Full Text Chapter Download: US $37.50 Add to Cart
Chapter 25
Efficiency of Liquidity Management in Indian Tyre Industry: A Study of Selected Companies during the Post-Liberalisation Era
This ratio measures the efficiency of inventory management of a firm. If the inventory is efficiently managed, it will help in enhancing the liquidity of the firm. A high ITR indicates a high level of efficiency in inventory management and it is good from the liquidity point of view whereas a low ratio implies excessive inventory levels than warranted by volume of operation.
Published in Chapter: Efficiency of Liquidity Management in Indian Tyre Industry: A Study of Selected Companies during the Post-Liberalisation Era; From: Handbook of Research on Strategic Business Infrastructure Development and Contemporary Issues in Finance
Full Text Chapter Download: US $37.50 Add to Cart
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