Business & Marketing

Inventory Turnover Calculator

How many times a year do you sell and replace your stock?

By TheCalcTools Updated Formula checked and tested

Your numbers

Symbol only: enter amounts in the currency you pick.
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Your results

Average inventory
Average inventory
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Inventory turnover
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Days sales of inventory
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Inventory Turnover Calculator by TheCalcTools

How the Inventory Turnover Calculator works

Enter cost of goods sold for the year and the inventory value at the start and end.

Average inventory is the mean of the two.

Turnover is COGS ÷ average inventory; dividing 365 by turnover gives days of stock.

The formula

Turnover = COGS ÷ average inventoryDays sales of inventory = 365 ÷ turnover

Worked example

Using the default values shown in the calculator:

Cost of goods sold (year)$480000
Beginning inventory$90000
Ending inventory$110000
  1. Average inventory = (90,000 + 110,000) ÷ 2 = $100,000.
  2. Turnover = 480,000 ÷ 100,000 = 4.80.
  3. Days of stock = 76.

Result:

Average inventory$100,000
Inventory turnover4.80
Days sales of inventory76

Frequently asked questions

Is a higher turnover better?

Usually, since cash is not tied up in stock, but too high may mean frequent stock-outs. Compare with your industry.

Why use cost of goods sold?

Inventory is valued at cost, so COGS matches the same basis. Sales revenue includes margin and would overstate turnover.

Sources and further reading

Economic Order Quantity (EOQ) CalculatorHow much should you reorder each time to keep inventory costs lowest? Financial Ratios CalculatorA fast health check of liquidity and leverage Profit Margin CalculatorEnter revenue and cost to see profit, margin and markup together

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This calculator gives estimates for information only. Check important results independently before you rely on them. See our disclaimer.