Free Inventory Turnover Calculator
Calculate inventory turnover to measure how many times inventory is sold and replaced over a period.
Inventory Turnover
6.00
Inventory Turnover vs Cost of Goods Sold (COGS)
How to Calculate Inventory Turnover
Formula
Inventory Turnover = Cost of Goods Sold / Average Inventory Days to Sell Inventory = 365 / Inventory Turnover
Inventory turnover tells you how many times you cycle through your entire stock during a year. Higher turnover means products sell quickly, tying up less cash in warehoused goods. The days-to-sell metric converts this into a more intuitive timeframe showing how long the average item sits before being sold.
Example Calculation
A retailer has $600,000 in COGS. Inventory was $80,000 at the start of the year and $120,000 at the end.
- 01Average Inventory = ($80,000 + $120,000) / 2 = $100,000
- 02Inventory Turnover = $600,000 / $100,000 = 6.0
- 03Days to Sell = 365 / 6.0 = 60.8 days
- 04Inventory cycles through about 6 times per year.
Frequently Asked Questions
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