Optimize Your Stock: Inventory Turnover Calculator
Inventory Turnover Calculator
Measure how efficiently your company is managing its inventory by calculating the Inventory Turnover ratio.
Input Your Data
The direct costs attributable to the production of the goods sold.
The value of inventory at the start of the accounting period.
The value of inventory at the end of the accounting period.
Your Results
Average Inventory:
$0.00
The average value of inventory over the period.
Inventory Turnover:
0.00 times
Indicates how many times a company has sold and replaced its inventory during a period.
How It Works
- Enter your Cost of Goods Sold (COGS) for the period.
- Input the value of inventory at the beginning of the period.
- Provide the value of inventory at the end of the period.
- Click "Calculate" to see your average inventory and the turnover ratio.
- The "Clear" button will reset all fields.
Formula for Average Inventory: (Beginning Inventory + Ending Inventory) / 2
Formula for Inventory Turnover: Cost of Goods Sold / Average Inventory
Interpretation: A higher turnover ratio generally indicates efficient inventory management.
How the inventory turnover calculator works
Inventory turnover shows how many times a business sells and replaces its stock in a period. Enter the cost of goods sold and the opening and closing inventory.
Days in inventory = 365 ÷ Inventory turnover
Worked example
Cost of goods sold is 90,000. Opening inventory is 20,000 and closing inventory is 25,000, so the average is 22,500. Turnover = 90,000 ÷ 22,500 = 4 times. Days in inventory = 365 ÷ 4 = about 91 days.
Frequently asked questions
Why use cost of goods sold and not sales?
Inventory is recorded at cost, so cost of goods sold is the consistent comparison.
Is a higher turnover always better?
Not always. Very high turnover can mean stock-outs and lost sales. What is ideal depends on the industry.
Related: Inventory turnover · Inventory · Cost of goods sold · All calculators
