What metric measures the speed at which inventory converts into sales?

The metric that measures the speed at which inventory converts into sales is the Inventory Turnover Ratio. This ratio indicates how many times a company sells and replaces its inventory over a specific period, usually a year. A higher inventory turnover ratio signifies that a company is efficiently managing its inventory and is able to sell its products quickly. This can be advantageous because it reduces holding costs and minimizes the risk of obsolescence associated with unsold inventory.

On the other hand, other options such as Sales Ratio, Stock Performance Ratio, and Inventory Growth Rate do not specifically assess the efficiency of inventory management in terms of sales conversion. The Sales Ratio is more focused on revenue generation relative to other metrics, the Stock Performance Ratio typically examines the stock's market performance rather than operational efficiency, and the Inventory Growth Rate measures changes in the level of inventory without directly linking it to sales performance. Thus, the Inventory Turnover Ratio is the most relevant metric for evaluating how quickly inventory is turning into sales.