Inventory Turnover Calculator
How many times stock turns over in a year, how many days of stock you hold, and what it ties up.
Turnover is cost of goods sold divided by average inventory at cost.
How the inventory turnover calculator works
Turnover is cost of goods sold divided by average inventory at cost. Using cost on both sides matters — mixing retail-priced inventory with cost-priced sales inflates the ratio by your whole margin.
Days of inventory is the same fact stated more usefully: 365 divided by turns. Six turns a year is about 61 days of stock sitting on shelves.
The figure that makes it concrete is the cash tied up. Inventory is money you have already spent and cannot use, and the carrying cost on top — storage, insurance, obsolescence, capital — is commonly 20 to 30% of inventory value a year. Slow turns are expensive in a way the ratio alone does not convey.
Formula: turns = COGS / average inventory; days = 365 / turns
Worked examples
| Inputs | Inventory turns per year | Note |
|---|---|---|
| 840,000 COGS on 140,000 average stock | 6 | 6 turns, 61 days |
| Slow-moving stock | 1.75 | under 2 turns |
| Fast-moving goods | 24 | 24 turns |
FAQFrequently asked questions
How do I calculate inventory turnover?
Cost of goods sold divided by average inventory, both at cost.
Why must both be at cost?
Because mixing retail-valued stock with cost-valued sales inflates the ratio by your entire margin.
What is a good turnover rate?
Groceries turn 15 to 25 times a year; furniture and jewellery under 3. Compare within your category only.
What does days of inventory mean?
365 divided by turns — how long stock sits before selling. Six turns is about 61 days.
What does holding stock actually cost?
Commonly 20 to 30% of its value a year once storage, insurance, obsolescence and tied-up capital are counted.
Where these figures come from
- APICS / ASCM — inventory management terminology — the turnover, safety stock and reorder point definitions used here
- US Federal Trade Commission — the US consumer protection regulator
Last checked: September 2026. These are standard retail and inventory-management definitions.