turns

turnover or turns

Terms used to describe the number of operating cycles in a defined period of time or the length of each specific operating cycle. Typical turnover cycles are: the rate at which accounts receivable converts to cash, the rate at which inventory converts to receivables or cash, the rate at which accounts payable are paid, and the number of times in a year inventory can be said to be sold and replaced. For example, if a firm's average inventory level is equivalent to one quarter of its annual sales, it can be said that inventory turns four times a year.

(See days inventory, days payables and days receivables for definitions of other common measurements of turnover.)

While turnover concepts are most often applied to elements of the working capital conversion cycle, there are other applications. For example, asset turnover is the ratio of net sales divided by total assets. American Banker Glossary