Inventory Turnover Calculator
Find how many times stock sells through in a period and how many days it sits on the shelf.
- Days of inventory
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What is the Inventory Turnover Calculator?
The inventory turnover calculator shows how many times you sell and replace your stock during a period, and the average days an item stays in inventory. Enter cost of goods sold and average inventory value to read both figures.
How it works
Turnover ratio equals cost of goods sold divided by average inventory. Days of inventory equal the number of days in the period divided by the turnover ratio. For example, a turnover of 4 over a 365-day year means stock sits for roughly 91 days on average.
How to use it
- Enter the cost of goods sold for the period.
- Enter the average inventory value over the same period.
- Enter the number of days in the period.
- Read the turnover ratio and days of inventory.
Inventory Turnover Calculator — FAQ
How do I get average inventory?
Add the opening and closing stock values for the period and divide by two. Using monthly values gives a more accurate average.
Is a higher turnover always better?
Not always. Very high turnover can mean stock-outs, while low turnover can mean cash tied up in slow stock. Compare with similar businesses.
Should I use sales or cost of goods sold?
Use cost of goods sold, so both figures are at cost. Using sales mixes cost and price values.