Inventory turnover is generally a more important ratio for a manufacturing firm than a service firm.

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Inventory turnover measures how efficiently a company is managing its inventory. Manufacturing firms typically have more inventory to manage and therefore inventory turnover is a more important ratio for them compared to service firms. Service firms typically have fewer inventory-related costs and therefore may not be as focused on managing their inventory turnover as manufacturing firms.

Inventory Turnover Is Generally a More Important Ratio for a Manufacturing