Inventory Turnover Ratio Calculator
Inventory turnover = cost of goods sold ÷ average inventory. Get the ratio and days sales of inventory for a year, half-year, quarter or month. How it works
Use the Inventory Turnover Ratio Calculator
About the Inventory Turnover Ratio Calculator
Inventory turnover = cost of goods sold ÷ average inventory. $150,000 of annual COGS with $25,000 of inventory at the start and $35,000 at the end gives an average of $30,000.00, a turnover of 5.00x and 73.0 days to sell the stock (365 ÷ 5). Days to sell is the figure accountants call days sales of inventory (DSI). Choose a half-year, quarter or month when the COGS covers that period instead.
Days to sell inventory for a turnover ratio
| Turnover ratio | Year (365 days) | Half-year (180 days) | Quarter (90 days) | Month (30 days) |
|---|---|---|---|---|
| 2.00x | 182.5 days | 90.0 days | 45.0 days | 15.0 days |
| 4.00x | 91.3 days | 45.0 days | 22.5 days | 7.5 days |
| 5.00x | 73.0 days | 36.0 days | 18.0 days | 6.0 days |
| 6.00x | 60.8 days | 30.0 days | 15.0 days | 5.0 days |
| 8.00x | 45.6 days | 22.5 days | 11.3 days | 3.8 days |
| 12.00x | 30.4 days | 15.0 days | 7.5 days | 2.5 days |
| 24.00x | 15.2 days | 7.5 days | 3.8 days | 1.3 days |
Days to sell = days in the period ÷ the turnover ratio for that period’s COGS. The periods are fixed at 365, 180, 90 and 30 days, so two half-years, four quarters or twelve months add up to 360 days, not 365.
Frequently asked questions
- What is the inventory turnover formula?
- Turnover = COGS ÷ ((beginning inventory + ending inventory) ÷ 2). With an average inventory of $30,000.00, the $150,000 of COGS above is $150,000 ÷ $30,000.00 = 5.00x. Use inventory at cost, as COGS is, not at selling price.
- How do you calculate days sales of inventory (DSI)?
- Days in the period ÷ the turnover ratio. Over a year, 8.00x is 45.6 days, and 12.00x is 30.4 days, about a month of stock on hand.
- What if my COGS is for one quarter?
- Choose Quarter (90 days). $40,000 of quarterly COGS on an average inventory of $30,000.00 is 1.33x and 67.5 days. Left on a year, the same figures would show 273.8 days.
- What is a good inventory turnover ratio?
- There is no single good number: a grocer turns stock far more often than a furniture or jewelry shop. Read it against your own earlier periods and against businesses selling the same things. A ratio falling from one period to the next means stock is piling up or selling more slowly; a ratio rising sharply can mean the shelves are running thin and you are missing sales. The calculator gives no benchmark.
- Why can’t the ratio be calculated?
- When beginning and ending inventory are both 0 the average is 0 and the division has no answer, so the calculator shows a message. COGS of 0 gives a ratio of 0.00x and no days to sell.
Related Tools
View all toolsBasic Calculator
Basic calculator for + − × ÷ in the standard order of operations (2 + 3 × 4 = 14), with % and memory keys, ^ for powers and the result as a fraction.
Simple Interest Calculator
Simple interest calculator using I = P × r × t. Enter the principal, annual rate and a time in years, months or days to get the interest and the total.
Mortgage Calculator
Monthly principal-and-interest payment on a fixed-rate mortgage from the loan amount, or home price and down payment, plus the total paid and total interest.
Mortgage Amortization Schedule Calculator
Mortgage amortization schedule for a fixed-rate loan: interest, principal and balance each month, with an optional extra payment and yearly totals.
Retirement Calculator
Project retirement savings from your age, balance, monthly saving and return, and compare them in today’s dollars with the 4% rule and what lasts to age 90.
Inflation Calculator
See what an amount will cost in the future at an inflation rate you assume, and what it will buy in today’s money. No historical or CPI data: you set the rate.