Inventory Turnover Calculator

What this tool estimates

Inventory turnover measures how many times your average stock sells and replaces itself: turnover = cost of goods sold ÷ average inventory value. Days of inventory is the same figure expressed as time: 365 ÷ annualized turns.

Inputs to verify

Use COGS — not revenue — because inventory is valued at cost. Match the stock pool: whole-catalog COGS with whole-catalog inventory, or a single SKU's unit cost flow with that SKU's stock. The start and end values are averaged to avoid over-weighting a single snapshot.

Reading the result

Faster turns mean less cash parked in stock for the same sales. Very fast turns can hide thin buffers and stockout risk; very slow turns tie up working capital and raise holding cost. Compare against your own history and your category, not a universal benchmark.

Important assumptions

Annualized turns scale the entered period to a year, so short noisy periods exaggerate swings. Averaging start and end values smooths growth but not seasonal peaks; for seasonal catalogs, compare the same period year over year.

When not to rely on the result alone

High-margin slow movers can be healthy; loss-leader fast movers can be weak. Review margin, stockout history, and holding cost alongside turnover before changing purchasing policy.

See the cash tied up in stock, estimate holding cost, or read the planning basics.