Inventory Turnover Calculator
Calculate inventory turnover ratio, days sales of inventory (DSI), and assess efficiency.
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How to use this calculator
Average inventory is the mean of beginning and ending inventory. Dividing COGS by average inventory shows how many times stock was cycled in the period. DSI converts this to the average number of days inventory is held.
- 1
Enter your cost of goods sold (COGS) for the period (typically annual).
- 2
Enter your beginning and ending inventory values for the same period.
- 3
Read the inventory turnover ratio, DSI, and efficiency assessment.
Frequently asked questions
What formula does the inventory turnover calculator use?
This tool uses turnover = COGS ÷ average inventory, where average inventory = (beginning inventory + ending inventory) ÷ 2. With COGS of 240,000 and inventories of 40,000 and 60,000, the average is 50,000.00 and turnover is 4.80×.
How are days sales of inventory (DSI) and weeks of supply derived?
DSI = 365 ÷ turnover, and weeks of supply = DSI ÷ 7. At 4.80× that gives 76.0 days and 10.9 weeks. The 365 is fixed, so enter a full year of COGS. If you enter a quarter’s COGS, the turnover ratio is for that quarter and the day count will be misleading.
What do the assessment labels mean?
They are fixed thresholds in this tool’s code: above 12× is “Excellent (fast-moving)”, above 6× “Good”, above 3× “Average”, and 3× or less “Low (slow-moving)”. They are not industry standards, and a sensible turnover depends heavily on what you sell, so judge the number against your own history and similar businesses.
What happens when average inventory is zero?
The ratio would require dividing by zero, so the tool shows “n/a (average inventory is zero)” and the average, and nothing else. Earlier it displayed 0.00× and a “Low” rating, which wrongly suggested stock that never sold. Enter at least one non-zero inventory value to get a result.
What if COGS is zero?
Turnover is 0.00×, the assessment says low, and DSI shows “n/a (no cost of goods sold)”, because dividing 365 by zero is undefined. Negative COGS or inventory values are treated as 0, since a negative stock value cannot be averaged meaningfully.
Why can a falling inventory give a surprising answer?
The average only uses two points in time. With COGS of 90,000 and inventory falling from 30,000 to 10,000, the average is 20,000.00 and turnover is 4.50×. A seasonal peak in the middle of the period never reaches the formula, so use a shorter period or an average of monthly balances if stock swings a lot.
Should I use sales or COGS?
This tool is built on COGS, which is valued at cost like inventory. Dividing sales by inventory would give a larger number because sales include your markup, so the result would not be comparable with figures calculated from COGS. Use the same definition every time you compare periods.
Inventory turnover calculator — turns, days of stock and weeks of supply
From two stock counts to days on the shelf
The calculator needs three numbers: cost of goods sold for the period, and the value of inventory at the start and at the end. It averages the two inventory values, divides COGS by that average to get the number of turns, and converts the turns into days and weeks. Because COGS and inventory are both measured at cost, the ratio compares like with like.
| Output | Calculation | Notes |
|---|---|---|
| Average inventory | (Beginning + ending) ÷ 2 | Two data points only |
| Turnover | COGS ÷ average inventory | Shown as a multiple, such as 4.80× |
| DSI | 365 ÷ turnover | Assumes COGS covers a full year |
| Weeks of supply | DSI ÷ 7 | |
| Assessment | > 12× / > 6× / > 3× / otherwise | Excellent / Good / Average / Low |
Three runs of the calculator
Each row below is output for the inputs shown. They cover stock building up, stock being run down and a high-volume case, which sit in different assessment bands.
| COGS · beginning · ending | Average | Turnover | DSI | Weeks | Assessment |
|---|---|---|---|---|---|
| 240,000 · 40,000 · 60,000 | 50,000.00 | 4.80× | 76.0 days | 10.9 | Average |
| 90,000 · 30,000 · 10,000 | 20,000.00 | 4.50× | 81.1 days | 11.6 | Average |
| 500,000 · 20,000 · 30,000 | 25,000.00 | 20.00× | 18.3 days | 2.6 | Excellent (fast-moving) |
What the examples show
The first business holds about 76 days of stock, and its ending inventory is higher than its beginning, which pulls the average up and the turnover down. The second sells less in total but runs its stock down, so its average is smaller and it still lands at a similar turnover. Comparing turnover with the direction of the stock balance explains more than the ratio alone.
Choosing the period
Use a full year of COGS if you want the day count to be right, since the formula divides 365 by the turns. For a quarter, the ratio describes that quarter, and multiplying the COGS by four before entering it gives a rough annualised figure that ignores seasonality. When your stock level changes sharply during the year, average more than two balances before you trust the result.
Limits of the figure
A high turnover can mean efficient buying or stock-outs that cost sales, and a low one can mean slow items or deliberate stockpiling. The calculator cannot see which. It also cannot split fast sellers from dead stock, so run it by product group when you can. Its rating bands are simple cut-offs written into the tool, not benchmarks for any trade. Track your own figure period after period, because the direction of change usually tells you more than a single reading.
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Results are estimates for informational purposes only and do not constitute professional financial, medical, legal, or technical advice. Read full disclaimer →