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Inventory / Inventory Turnover Calculator

Inventory Turnover Calculator

How many times you sold through your inventory in a period, and how many days stock sits on the shelf on average.
$

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$

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$

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Whole number, 1–3660

365 for a year, 90 for a quarter.

Inventory turnover
6×
60.8 daysdays of inventory
$40,000.00average inventory
Cost of goods sold$240,000.00
Average inventory · ($50,000.00 + $30,000.00) ÷ 2$40,000.00
Turnover · COGS ÷ average inventory6×
Days of inventory · 365 ÷ turnover60.8

Stock sits about 61 days on average before it sells. Compare with businesses in your trade, not a single target.

See breakdown

How the inventory turnover calculation works

  1. Average the inventory

    Add beginning and ending inventory at cost and divide by 2. ($50,000 + $30,000) ÷ 2 = $40,000.

  2. Divide cost of goods sold by it

    $240,000 ÷ $40,000 = 6 turns a year. Use COGS, not sales, so both numbers are at cost.

  3. Convert turns to days

    365 ÷ 6 = 60.8 days. That is how long an average item waits before it sells.

  4. Read the trend

    Higher turnover means less cash tied up in stock. Very high turnover can also mean frequent stock-outs.

Worked example. With $240,000 of COGS and inventory of $50,000 at the start and $30,000 at the end, average inventory is $40,000. Turnover is 6.0 times, or 60.8 days of inventory.

Inventory Turnover FAQ

What is the inventory turnover formula?

Inventory turnover = cost of goods sold ÷ average inventory, where average inventory = (beginning + ending inventory) ÷ 2. With $240,000 of COGS and $40,000 of average inventory, turnover is 6 times.

What is the days inventory outstanding formula?

Days inventory outstanding (DIO), also called days sales of inventory, is days in the period ÷ turnover, or average inventory ÷ COGS × days. 365 ÷ 6 = 60.8 days.

What is a good inventory turnover ratio?

It depends on the trade. From NYU Stern (Damodaran) data for US listed companies, January 2026, turnover works out to about 31 times a year for restaurants (12 days), 13 for grocery (27 days), 8 for general retail (47 days) and 4 for furniture and home furnishings (96 days). Small independents often turn slower. Compare with your own history too.

Should I use sales or COGS?

Use COGS. Inventory is valued at cost, so dividing sales by it overstates turnover by your markup.

How do I calculate turnover for a quarter or a month?

Use that period's COGS and inventory, and set days to 90 or 30. $120,000 of quarterly COGS on $20,000 average inventory is 6 turns in 90 days, or 15 days of inventory. Multiply by 365 ÷ 90 to annualise: about 24.3 turns a year.

Is a higher inventory turnover always better?

Not always. Higher turnover frees cash and cuts storage and spoilage, but very high turnover can mean you run out of stock and lose sales. Watch stock-outs alongside the ratio.

Sources: NYU Stern (Damodaran): Working capital ratios by sector, US, January 2026 · NYU Stern (Damodaran): Margins by sector, US, January 2026

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COGS CalculatorCost of goods sold from your inventory counts and purchases, plus gross profit and margin if you add revenue.EOQ CalculatorThe order size that keeps the combined cost of placing orders and holding stock as low as possible.Reorder Point CalculatorThe stock level that should trigger your next order, including safety stock to cover slow deliveries and busy days.Accounts Receivable Turnover CalculatorYour accounts receivable turnover: how many times a year you collect average receivables, and how many days customers take to pay.Current Ratio CalculatorMeasure short-term liquidity from your balance sheet: the current ratio, the stricter quick ratio, and working capital.Cash Conversion Cycle CalculatorYour cash conversion cycle (DIO + DSO − DPO) and the dollar cash gap it creates, so you know how much working capital to keep.Cost of Goods Manufactured CalculatorCalculate cost of goods manufactured from raw materials, direct labor, overhead and work in process, with cost per unit and cost of goods sold.Inventory Carrying Cost CalculatorAdd up what it costs to hold your stock for a year: the money tied up in it, storage, insurance and losses. See it in dollars, as a percentage of inventory value, and per unit for the EOQ formula.