Inventory Turnover Calculator
Calculate inventory turnover ratio and days inventory outstanding.
How this calculator works
How to use this calculator
Enter cost of goods sold, beginning inventory, and ending inventory for the same period. The calculator estimates how many times inventory is sold and replaced.
Formula used
Average Inventory = (Beginning Inventory + Ending Inventory) ÷ 2
Inventory Turnover = Cost of Goods Sold ÷ Average Inventory
Days Inventory Outstanding = 365 ÷ Inventory Turnover
Example calculation
COGS = $240,000, beginning inventory = $40,000, and ending inventory = $60,000. Average inventory = $50,000, turnover = 4.80 times, and days inventory outstanding = 76.0 days.
What the result means
A higher turnover ratio may show faster inventory movement, while a lower ratio may signal slow-moving stock or overstocking.
Frequently asked questions
What does inventory turnover mean?
It shows how many times a business sells and replaces its average inventory during a period.
Should I use revenue or COGS?
Use cost of goods sold because inventory is usually recorded at cost, not selling price.
Is high inventory turnover always good?
Not always. Very high turnover may also mean stock shortages if the business cannot meet demand.