🔄Inventory Turnover Calculator

About this tool

Enter the cost of goods sold for a period, the inventory value at the start and end of it, and the number of days. The calculator shows the inventory turnover ratio, the days inventory outstanding and the average inventory. A second section works out the sell-through rate from units sold and units available, the measure retailers use for a season or a product line.

How inventory turnover is measured

Inventory turnover is cost of goods sold ÷ average inventory, where average inventory is the start and end values added and halved, both at cost. A business with 480,000 cost of goods sold in a year, 70,000 of stock at the start and 90,000 at the end has average inventory of 80,000 and turns it over 6 times a year. Days inventory outstanding, also called days sales of inventory, converts that into time. 365 ÷ 6 is about 61 days, the average time an item sits before it sells. Higher turnover means less cash tied up and less risk of dead stock, though very high turnover can mean frequent stock-outs. What counts as good depends on the trade. Grocers turn stock a dozen or more times a year, while furniture and jewellery shops manage two or three. Sell-through rate is units sold ÷ units available, so 850 sold out of 1,000 is 85%. Honest limits: use cost, not retail value, and average several snapshots if stock swings with the seasons. The EOQ calculator and the reorder point calculator help improve the ratio, and the margin calculator shows profit per unit. Margin vs markup: why 50% markup is 33% margin, and how to price from either explains the cost side.

Frequently asked questions