In plain English
Turn measures velocity. Four turns a year means your shelf empties and refills roughly every quarter.
Turn multiplied by margin is what actually earns. A 25% margin turning eight times a year beats a 45% margin turning twice.
Example
COGS $130,000 ÷ average inventory $32,500 = 4 turns per year.
Why it matters
Velocity, not margin, is what turns working capital into a bigger business.
COMMON MISTAKEChasing the highest-margin load and letting it sit for six months.