Which of the following best describes inventory turnover?

Inventory turnover is a key performance indicator that measures how quickly a company sells and replaces its inventory within a specific period, typically a year. It reflects the efficiency of inventory management and sales performance. A higher inventory turnover ratio indicates that a company is selling goods quickly, which can lead to better cash flow and reduced holding costs.

In this context, it is important to recognize that the other options do not accurately capture the concept of inventory turnover. The number of employees working in inventory management pertains to staffing rather than the movement of inventory. The method of calculating cost of goods sold relates to financial accounting and the expenses associated with manufacturing or purchasing inventory, not the turnover rate itself. The average shelf life of products in stock is more about the duration for which products remain in inventory rather than how often they are sold. Thus, the first choice stands out as the most accurate definition of inventory turnover.