Inventory Turnover Calculator
Shows how many times stock sold through in a period and how long it sits.
Share sends a link that reopens these numbers. Copy details pastes the full breakdown as a list.
The formula
average inventory = (start + end) ÷ 2 turnover = cost of goods sold ÷ average inventory days of inventory = days in period ÷ turnover
Turnover is how many times the stock sold through in the period. Days of inventory is how long the average item sits before it sells.
What to watch out for
Value inventory at cost, and use the cost of goods sold for the same period as the days figure. If stock swings during the year, an average of monthly figures gives a truer result.
Frequently Asked Questions
How do I calculate inventory turnover?
Divide cost of goods sold by average inventory. 600,000 ÷ 100,000 is 6.0 times a year, which is 60.8 days of inventory.
Why use cost of goods sold and not sales?
Inventory is valued at cost, so cost of goods sold compares like with like. Using sales includes your margin and makes turnover look higher than it is.
What is a good inventory turnover?
It depends on the industry, because fresh food and heavy machinery sell at very different speeds. Compare with similar businesses and your own past periods.