Is a high inventory turnover ratio good?

Yes, a high inventory turnover ratio is good. Typically, the higher the ratio, the better. Inventory turnover measures how often a company replaces inventory relative to the cost of sales. A high ratio means that sales are strong and there is a reasonable amount of inventory being purchased.

A low inventory turnover ratio can be a sign that there are weak sales, or that there is overstocking, which means too much inventory has been purchased. There are instances where a too high inventory turnover can be a sign that there is not enough inventory purchased, and you need to have more to not risk any sellouts.