Inventory Turnover Calculator

Use values from the same period and currency. Fees and taxes apply only where explicitly included in inputs.

What this tool does

Measures how many times inventory sold through during a period. Put cost of goods sold in the first field and average inventory value in the second. Dividing 365 by the result gives average days of inventory.

How to use it

Choose a period, usually a year or a quarter.
In the first field, enter cost of goods sold for that period — not revenue.
In the second field, enter average inventory: (opening + closing) ÷ 2.
Run it to get the turnover ratio.

Worked example

COGS 100 against average inventory 200 gives 0.5 turns. COGS 1,200 against 200 gives 6 turns, or about 365÷6 ≈ 61 days of inventory.

Calculation method

Ratioa/b*1

Frequently asked questions

Can I use revenue instead?: Revenue includes margin and inflates the ratio. Inventory is carried at cost, so the numerator should be cost of goods sold.
Is a higher ratio always better?: No. A very high ratio can mean you are losing sales to stockouts. Read it alongside industry figures and your stockout rate.

What this tool does not cover

For seasonal businesses, averaging only opening and closing balances distorts the result. A monthly average is more accurate.