Inventory Turnover Calculator

Inventory Turnover Calculator

How efficiently is your inventory moving? This calculator shows how many times per year you sell through your entire average inventory value, and how many days it takes on average.

Turnover = Cost of Goods Sold / Average Inventory Value
Days to Sell = 365 / Turnover

Example

$500,000 COGS, $100,000 average inventory value:

Turnover = 500,000 / 100,000 = 5.0x per year (73 days to sell through average inventory)

What Turnover Tells You

Higher turnover generally signals efficient inventory management and strong sales velocity - capital isn't sitting tied up in unsold stock for long. Low turnover can indicate overstocking, slow-moving or obsolete products, or poor demand forecasting, all of which tie up cash that could otherwise be reinvested elsewhere in the business.

Benchmarks Vary by Industry

A "good" turnover ratio depends heavily on the product category - fast fashion and perishable goods retailers typically target much higher turnover (often 6-12x per year or more) than furniture, jewelry, or big-ticket electronics retailers, where slower-moving, higher-margin inventory is the norm.