Inventory Turnover Calculator
Measure how quickly stock sells and how many days of inventory you hold.
About the Inventory Turnover Calculator
Enter the year's cost of goods sold and your inventory value at the start and end of the year. The calculator gives inventory turnover, average inventory and days inventory outstanding: how long stock sits before it sells.
Inventory turnover divides the cost of goods sold by average inventory: how many times stock is sold and replaced in a year. Higher is generally better, but too high may mean stock-outs.
The formula
Turnover = COGS ÷ average inventory; DIO = 365 ÷ turnover
Worked example
COGS 600,000; inventory 90,000 at the start and 110,000 at the end
- Average inventory: (90,000 + 110,000) ÷ 2 = 100,000
- Turnover = 600,000 ÷ 100,000 = 6×
- Days on hand: 365 ÷ 6 = 60.8 days
Things to keep in mind
- Seasonal businesses should average monthly inventory, not just two year-end figures.
Questions people ask
Why use COGS, not sales?
Inventory is valued at cost, so COGS keeps both sides comparable.
What's typical?
Grocers 12–20×, apparel 4–6×, heavy equipment 2–3×.
How do I improve it?
Order smaller batches more often, clear slow-moving lines, and forecast demand better.