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Inventory Turnover Calculator
Find your inventory turnover ratio and days on hand.
Inventory turnover
—
Times per year.
| Days inventory | — |
|---|---|
| COGS | — |
| Avg inventory | — |
| — |
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How the Inventory Turnover Calculator Works
Inventory turnover shows how many times a business sells through and replaces its stock in a year. Divide the cost of goods sold by the average inventory. A company with $500,000 in COGS and $100,000 of average inventory turns over 5 times a year — about every 73 days.
Dividing 365 by the turnover gives days of inventory on hand. Higher turnover means leaner stock and less cash tied up, but too high can signal stockouts; too low suggests overstocking or slow sales. Compare within your industry.
inventory turnover = cost of goods sold ÷ average inventory
Frequently Asked Questions
How do you calculate inventory turnover?
Divide the cost of goods sold by the average inventory over the period. Divide 365 by that for days of inventory on hand.
What is a good inventory turnover ratio?
It varies widely by industry — grocery turns very fast, heavy equipment slowly. Compare against peers rather than a single target.
Should turnover use COGS or sales?
Cost of goods sold is the standard, because inventory is carried at cost. Using sales overstates turnover by including the markup.
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