Inventory turnover calculator
Turnover shows how many times you sold and replaced your stock in the period; a higher figure means less cash tied up on shelves.
Loading the tool…
Processing and privacy: The result is calculated inside your browser and your data is not sent to any server.
How to use it
- Enter cost of goods sold for the period, opening inventory value, closing inventory value and days in period.
- The result appears straight away and updates as you edit.
- Copy the result, or copy a link that keeps the same values to share it.
How it is calculated
Average inventory = (opening + closing inventory) ÷ 2. Turnover = cost of goods sold ÷ average inventory. Days to sell = days in period ÷ turnover.
Example
Inputs: Cost of goods sold for the period = 600,000, Opening inventory value = 90,000, Closing inventory value = 110,000, Days in period = 365 days. Result: Inventory turnover: 6 times; Average inventory: 100,000.00; Average days to sell inventory: 60.8 days.
Limits and caveats
- Use inventory at cost, not at retail price, so it matches cost of goods sold.
- A two-point average can miss seasonal stock swings; use a monthly average if you have one.
Questions about this tool
What is a good turnover ratio?
It depends on the trade; groceries turn far faster than furniture. Compare with your own past periods and similar stores.
Why cost of goods sold and not sales?
Inventory is carried at cost, and using sales would inflate the ratio by your profit margin.
What does a very low ratio mean?
Stock sits in the warehouse for a long time, which can point to overbuying or slow-moving products.