Inventory Turnover Calculator
Measure how efficiently your business manages inventory with our free turnover calculator. Enter COGS and inventory values to see the turnover ratio, days to sell inventory, and average inventory held.
Inventory turnover ratio measures how many times a company sells and replaces its entire inventory during a period. The formula is: Inventory Turnover = Cost of Goods Sold / Average Inventory, where Average Inventory = (Beginning Inventory + Ending Inventory) / 2. A higher ratio indicates more efficient inventory management and faster sales.
Days Sales in Inventory (DSI) converts the turnover ratio into the average number of days it takes to sell through inventory: DSI = 365 / Turnover Ratio. For example, a turnover ratio of 5.0 means inventory is sold and replaced about every 73 days. A grocery store might have a DSI of 10-20 days, while a furniture store might have 100-200 days.
Both metrics should be compared to industry benchmarks. A very high turnover might seem efficient but could indicate understocking and missed sales. A very low turnover usually indicates overstocking, obsolescence risk, or weak sales. The goal is to balance having enough inventory to meet demand without tying up excess capital in unsold goods.