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Inventory Turnover and Days of Inventory Calculator
Enter a year of cost of goods sold and your average inventory value, both at cost. The calculator returns your turnover ratio and days of inventory — how many days today's stock would last.
Inventory turnover
4.0×
How many times you sell through your average inventory in a year. Higher means less cash sitting on shelves.
Days of inventory
91 days
365 ÷ turnover — how long today's stock lasts at this rate, tying up about $45,000 of cash for 91 days at a time. Compare it to your supplier lead time: if lead time is longer, you're already late to reorder.
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What the two numbers mean
Turnover = COGS ÷ average inventory: how many times a year you sell through your stock. Days of inventory = 365 ÷ turnover: the same fact as a countdown. A 4× turnover means your average dollar of inventory sits for about 91 days before becoming revenue.
What to do with it
Compare products, not just the store: a blended number hides a fast seller financing a slow one. Falling turnover with steady sales means stock is piling up; rising turnover with stockouts means you're cutting it too thin. Check it against supplier lead time — if days of inventory is below lead time, the reorder is already late.
Full walkthrough: How to calculate days of inventory remaining.
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Frequently asked questions
What is a good inventory turnover ratio?
It depends on the category: fast-moving consumables turn far quicker than furniture or jewelry. More useful than a benchmark is your own trend and your per-product spread — a store doing 6× overall often has hero SKUs at 12× and dead stock at 1×, and the fix lives in that gap.
Should I use revenue or COGS to calculate turnover?
COGS, with inventory valued at cost. Using revenue against cost-valued inventory inflates the ratio by your margin and makes comparisons meaningless. If you only have revenue handy, divide by your blended markup first.
How do I calculate average inventory?
The simple version is (inventory at the start of the period + at the end) ÷ 2, at cost. If your stock swings a lot — seasonal buys, big container arrivals — average the month-end values instead so one snapshot doesn't distort the year.
What's the difference between days of inventory and sell-through rate?
Days of inventory says how long current stock lasts at the current sales rate. Sell-through rate says what share of the units you received actually sold in a period. The first guides reordering; the second judges how good the buy was.