Inventory Turnover Calculator and Days
Find how many times you sold and replaced your stock in a period, and how many days stock sits before it sells, from cost of goods sold and inventory.
Inventory turnover
6times
Days sales of inventory
60.8days
Average inventory
140,000
Turnover = cost of goods sold ÷ average inventory; days = days in the period ÷ turnover
Use cost figures for both, not sales and cost mixed. Compare with your own past periods and with businesses in the same trade.
Inventory turnover formula
Inventory turnover measures how many times a business sells and replaces its stock in a period. High turnover means stock moves quickly and less cash is tied up; low turnover can mean overbuying, slow sellers or old stock.
Inventory turnover formula
- Average inventory = (opening inventory + closing inventory) ÷ 2
- Inventory turnover = cost of goods sold ÷ average inventory
- Days sales of inventory (DSI) = days in the period ÷ turnover
Example: cost of goods sold 840,000, opening inventory 125,000 and closing 155,000. Average inventory is 140,000, turnover is 6.0 times a year, and stock sits for about 61 days on average.
Use cost, not sales
Inventory is carried at cost, so divide cost of goods sold by inventory at cost. Using sales instead inflates the ratio by your markup. For a quarter, use the quarter's cost of goods sold and 91 days.
Is my turnover good?
| Type of business | Typical turns a year |
|---|---|
| Grocery and fresh food | 12 or more |
| General retail and distribution | 4 to 8 |
| Furniture, jewellery, spare parts | 1 to 4 |
These are broad ranges; compare with your own history and your trade. Use the cash conversion cycle calculator to see how inventory days affect cash.
Copy the result, or save it as a PDF to attach to an email or a report. Nothing you type leaves your browser.
Features
- Turnover ratio
- Average inventory
- Days sales of inventory
- Any period length
- Formula shown
- Copy or PDF
Frequently asked questions
How do I calculate inventory turnover?
Divide cost of goods sold by average inventory. 600,000 ÷ 100,000 = 6 turns a year.
What are days sales of inventory?
The average number of days stock is held before it sells: 365 ÷ turnover. Six turns a year is about 61 days.
Is a higher inventory turnover always better?
Usually, but too high can mean stockouts and lost sales. Balance turnover with service level.
Is the calculator free?
Yes. No sign up. It runs in your browser, and you can copy the result or save it as a PDF.