Inventory Turnover Calculator
Quick answer: Inventory turnover equals annual cost of goods sold divided by average inventory. With $500,000 in COGS and $125,000 of average inventory, stock turns 4 times a year — about once every 91 days.
Inventory sitting on shelves ties up cash. This calculator shows how many times per year your stock sells through (the turnover ratio) and how many days each round of stock lasts, from your annual cost of goods sold and average inventory value.
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How to use this calculator
Enter your annual cost of goods sold (COGS) — the total cost of everything you sold in the year — and your average inventory value for the same period. If you only know your start and end inventory, add them and divide by two.
Results update as you type. A falling ratio over time can signal overstocking; a rising one can signal stronger sales or dangerously thin shelves.
How it works
Turnover ratio = annual COGS ÷ average inventory value. Days of inventory = 365 ÷ turnover ratio. Average inventory is commonly computed as (beginning inventory + ending inventory) ÷ 2.
Worked example
COGS $500,000, average inventory $125,000 → ratio 4.0; 365 ÷ 4 = 91.25 days of inventory.
Reference data
| Days per year | 365 |
| Average inventory | (Beginning inventory + ending inventory) ÷ 2 |
Source: defined constants (365 days/year); page built 2026 — no external dataset.
Method & sources
The turnover ratio divides the year's cost of goods sold by the average inventory held, giving the number of full stock cycles per year. Inverting it (365 ÷ ratio) gives the average days each cycle lasts. Every number the page reports is computed from your inputs; no external figures are used.
- Calculation method: standard accounting formulas stated in "How it works" above — no external dataset is used.
Frequently asked questions
What is a good inventory turnover ratio?
It depends on the industry — compare against your own past periods and industry benchmarks rather than a universal target.
What is the difference between turnover ratio and days of inventory?
They are the same measure inverted: the ratio counts turns per year, days of inventory counts days per turn.
How do I compute average inventory?
Add beginning-of-period and end-of-period inventory values and divide by two.
Is a higher turnover always better?
Higher means faster sales and less cash tied up, but too high risks stockouts. Balance speed against availability.