Overview

The Inventory Turnover Calculator measures how many times inventory is sold and replenished during a given period. A higher turnover indicates efficient inventory management, while a lower one may signal overstocking or slow sales. It is a key operational metric for retail, manufacturing, and distribution businesses.

Formula

Inventory Turnover = COGS ÷ Average Inventory
Average Inventory = (Beginning Inventory + Ending Inventory) ÷ 2
Days Inventory Outstanding = 365 ÷ Inventory Turnover

How to Use

1. 1Enter the cost of goods sold (COGS) for the period.
2. 2Enter beginning and ending inventory values.
3. 3Click 'Calculate' to see inventory turnover and days outstanding.
4. 4Compare with industry averages to assess inventory efficiency.

Tips

• ✔Turnover benchmarks vary widely by industry — compare within your sector.
• ✔Very high turnover may risk stockouts; very low turnover increases carrying costs.
• ✔Calculate quarterly for seasonal products.
• ✔Integrate with inventory management systems (e.g., JIT) for better efficiency.
• ✔The inventory valuation method (FIFO, LIFO) affects the figures.

FAQ