Inventory Turnover Calculator
Calculate your inventory turnover ratio and days to sell inventory. Free calculator with industry benchmarks — see how fast your inventory moves.
Ready to calculate
Enter your COGS and inventory values above to see your turnover ratio and days to sell.
How to Use This Inventory Turnover Calculator
- Choose your mode: Use “Enter Average” if you already know your average inventory value. Switch to “Calculate Average” to enter beginning and ending inventory values.
- Enter your Cost of Goods Sold (COGS) — total cost of goods sold for the period (from your income statement).
- Enter your inventory values — either the average directly, or beginning and ending values.
- See your results instantly — inventory turnover ratio, days to sell inventory, and industry benchmark comparison.
The calculator auto-calculates as you type and shows where your ratio falls compared to industry benchmarks.
The Formula
Inventory Turnover Ratio = Cost of Goods Sold (COGS) / Average Inventory
Days Sales of Inventory (DSI) = 365 / Inventory Turnover Ratio
Average Inventory = (Beginning Inventory + Ending Inventory) / 2
Example: Your business had $500,000 in COGS this year. Beginning inventory was $60,000 and ending inventory was $40,000:
- Average Inventory = ($60,000 + $40,000) / 2 = $50,000
- Turnover Ratio = $500,000 / $50,000 = 10x
- DSI = 365 / 10 = 37 days
A turnover ratio of 10x means you sell through your entire inventory about 10 times per year, or roughly every 37 days.
High vs. Low Inventory Turnover
Understanding what your ratio means is just as important as calculating it.
High Turnover (Good, Usually)
- Strong sales or efficient inventory management
- Less cash tied up in unsold stock
- Lower risk of inventory becoming obsolete or spoiling
- Watch out: Extremely high turnover could mean stockouts and lost sales
Low Turnover (Warning Sign)
- Overstocking or slow-moving products
- More cash tied up in inventory
- Higher risk of obsolescence, spoilage, or markdowns
- May indicate: Weak demand, poor forecasting, or too-broad product selection
Industry Benchmarks
| Industry | Typical Turnover | Typical DSI | Notes |
|---|---|---|---|
| Grocery / food retail | 14–20x | 18–26 days | Perishables drive high turnover |
| General retail | 8–12x | 30–46 days | Varies by product category |
| E-commerce | 6–10x | 37–61 days | Depends on fulfillment model |
| Manufacturing | 4–8x | 46–91 days | Raw materials + finished goods |
| Luxury goods | 2–4x | 91–183 days | High margins offset slow turns |
How to Improve Your Inventory Turnover
- Demand forecasting — use historical data to predict what will sell and when
- Reduce lead times — shorter supplier lead times let you order closer to when you need stock
- Identify slow movers — run ABC analysis to find items that sit too long, then markdown or discontinue
- Just-in-time ordering — order smaller quantities more frequently to reduce excess
- Negotiate consignment — for slow-moving categories, see if suppliers will take back unsold inventory
- Seasonal planning — adjust ordering for seasonal demand swings to avoid post-season excess
Frequently Asked Questions
What is a good inventory turnover ratio?
How do I calculate average inventory?
What is Days Sales of Inventory (DSI)?
What does a low inventory turnover ratio mean?
What does a high inventory turnover ratio mean?
Should I use cost or retail value for inventory?
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