Free tool · Inventory
Inventory Turnover Ratio Calculator
Measure how many times you sell and replace your stock in a period.
Enter your cost of goods sold and your average inventory value to get the turnover ratio and the equivalent days of inventory on hand. Turnover is the clearest single measure of whether stock is working for you or sitting still, and days on hand converts it into a figure that is easier to act on.
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How to use Inventory Turnover Ratio Calculator
Three steps, and nothing to install.
Enter cost of goods sold
Use COGS for the period, not revenue.
Enter average inventory value
Beginning plus ending inventory divided by two, at cost.
Read the ratio and days on hand
Compare against your own previous periods.
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Total the real annual cost of holding stock, not just what you paid for it.
Open ToolBeginning Inventory Calculator
Work backwards to the opening stock figure when your records are incomplete.
Open ToolHow do you calculate inventory turnover?
Divide cost of goods sold by average inventory at cost. The result is how many times stock was sold and replaced over the period. Dividing 365 by that ratio converts it into days of inventory on hand, which is usually the more intuitive figure.
Inventory Turnover Ratio Calculator formula
Turnover ratio = Cost of goods sold / Average inventory at cost Days on hand = 365 / Turnover ratio
Worked example: COGS of 250,000 against average inventory of 50,000 is a turnover of 5.0x, or 73 days of stock on hand.
How this works in your browser
Turnover is cost of goods sold divided by average inventory, and days on hand is 365 divided by that ratio. Both sides of the division are stated at cost, which is the detail that makes the number meaningful: inventory sits on the balance sheet at what you paid, so using revenue as the numerator would compare a marked-up figure against an unmarked-up one and overstate turnover by your entire gross margin. Everything is computed in your browser.
Who uses Inventory Turnover Ratio Calculator
Spotting dead stock
Identify lines that are turning far more slowly than the rest.
Tracking performance
Compare turnover across periods to see whether stock management is improving.
Freeing up cash
Find where working capital is sitting on shelves.
Benchmarking
Compare your ratio against sector norms.
Frequently asked questions
What it can and cannot do, and what happens to your files.
How is turnover calculated?
Cost of goods sold divided by average inventory value, both for the same period. Using COGS rather than revenue is important: inventory is carried at cost, so dividing revenue by inventory mixes two different bases and inflates the ratio by your whole margin.
What is a good turnover ratio?
Entirely sector-dependent, so compare against your own history and your industry rather than a universal target. Grocery turns stock dozens of times a year; furniture or jewellery may turn three or four. A ratio that is rising over time is usually more informative than its absolute value.
Can turnover be too high?
Yes, and it is often read as unambiguously good when it is not. Very high turnover can mean you are running too lean, stocking out and losing sales you never see. Read it alongside your stockout rate rather than on its own.
What does days on hand tell me?
How long your current stock would last at the current rate of sale, calculated as 365 divided by the turnover ratio. Most people find it easier to act on than the ratio: 90 days of stock is immediately meaningful in a way that a ratio of 4 is not.
Are my figures uploaded?
No. Everything is calculated in your browser.
Calculate inventory turnover - free.
Files never leave your device. No upload, no account, and free for unlimited use.
Also see: Average Inventory Calculator, Beginning Inventory Calculator, Finished Goods Inventory Calculator, Inventory Cost Calculator