Inventory Turnover Calculator
Inventory turnover measures how quickly stock is sold and replaced. A higher figure means less cash tied up on the shelves; a low one can point to overstocking or slow sales.
Enter your figures below. Results update as you type.
Inventory turnover6 times a yearStock sells through about every 61 days
- Average inventory
- $100,000.00
- Days of inventory on hand
- 60.8
- Cost of goods sold per month
- $50,000.00
How the Inventory Turnover calculation works
Inventory turnover = cost of goods sold / average inventory
With $600,000 of cost of goods sold and inventory averaging $100,000, stock turns over 6 times a year, or about every 61 days.
Frequently asked questions
What is a good inventory turnover ratio?
It depends on the industry. Grocers may turn stock 15 times a year or more, general retailers 4 to 8 times, and furniture or jewelry sellers far fewer. Compare with businesses like yours.
How do I calculate days of inventory?
Divide 365 by the turnover ratio. Six turns a year means stock is held for about 61 days on average.
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