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Inventory Turnover Calculator
Inventory turnover is how many times you sell through your stock in a period. Enter cost of goods sold and your beginning and ending inventory to get the turnover ratio and days sales of inventory — the average number of days stock sits before it sells.
- Days sales of inventory
- 73 days
- Average inventory
- $100,000.00
Saved setups
Save a set of inputs you reuse — your usual rate, your loan, your room sizes — and load it back in one tap.
Your recent calculations
Results you calculate here are kept on this device so you can come back to them.
Formula
How to use it
- Enter cost of goods sold for the period.
- Enter inventory value at the start and at the end of the period, at cost.
- Leave days at 365 for a year, or change it to match the period.
- Read the turnover and the days of stock on hand.
Worked examples
$500,000 cost of goods sold with inventory going from $80,000 to $120,000
- Average inventory
- $100,000.00
- Inventory turnover
- 5 times
- Days sales of inventory
- 73 days
$1,200,000 cost of goods sold with inventory going from $150,000 to $250,000
- Average inventory
- $200,000.00
- Inventory turnover
- 6 times
- Days sales of inventory
- 60.8 days
Reading the number
Higher turnover means cash is tied up in stock for less time. A turnover of 5 means inventory sells through about every 73 days; a turnover of 12 means about once a month.
What is normal depends on what you sell. Supermarkets and fast food turn stock very quickly because goods are perishable; furniture, jewelry and car dealers turn slowly. Very high turnover can also be a warning — it may mean you run out of stock and lose sales.
Use cost, not sales
Inventory is carried at cost, so divide it into cost of goods sold, not revenue. Using sales in the numerator inflates turnover by your markup and makes comparisons meaningless.
If stock levels swing through the year, two snapshots can mislead. Averaging monthly inventory balances gives a truer figure for a seasonal business.
Questions people ask
How do you calculate inventory turnover?
Divide cost of goods sold by average inventory. $500,000 of COGS with $100,000 of average inventory is a turnover of 5.
How do I turn inventory turnover into days?
Divide 365 by the turnover. A turnover of 5 is 73 days of inventory; a turnover of 6 is about 61 days.
Is a higher inventory turnover better?
Usually, because less cash sits on the shelf — but only up to the point where you start running out of stock. The best level balances holding cost against lost sales.