CalculatorHandy

E-commerce Calculators

Inventory Turnover Calculator

Inventory turnover shows how many times you sell through your average stock in a period. A higher number usually means less cash tied up in stock; days inventory outstanding shows the same thing in days.

$
$
$
Inventory turnover6×in 365 days
Days inventory outstanding
60.8 days
Average inventory
$40,000.00
Step-by-step working
  1. Average inventory = ($45,000.00 + $35,000.00) ÷ 2 = $40,000.00
  2. Turnover = $240,000.00 ÷ $40,000.00 = 6
  3. Days of inventory = 365 ÷ 6 = 60.8

How to use the Inventory Turnover Calculator

  1. Enter cost of goods sold for the period.
  2. Enter inventory value at cost at the start and end.
  3. Set the number of days in the period and press Calculate.

Formula

Turnover = cost of goods sold ÷ average inventory

Days inventory outstanding = days in period ÷ turnover

Examples

  • COGS 240,000; inventory 45,000 → 35,000: average 40,000, turnover 6× a year, about 61 days of stock.

Frequently asked questions

What is a good inventory turnover?

It varies widely: groceries turn over far faster than furniture. Compare with your own history and similar businesses.

Should I use sales or cost of goods sold?

Use cost of goods sold, because inventory is valued at cost. Using sales overstates turnover.

Related calculators