Free online calculator
Inventory Turnover Calculator
Measure how often average inventory is sold through using COGS and opening and closing inventory at cost.. Includes a worked example, formula and practical FAQs.
Formula: Inventory turnover = COGS ÷ average inventory
How to use the Inventory Turnover Calculator
Measure how often average inventory is sold through using COGS and opening and closing inventory at cost.
Formula
Average inventory = (beginning + ending) ÷ 2; turnover = COGS ÷ average inventory; inventory days = 365 ÷ turnover.
Worked example
COGS of $60,000 with $10,000 opening and $14,000 closing inventory gives a $12,000 average, 5× turnover and 73 days.
Interpretation and limitations
The days figure uses a fixed 365-day year. Use annual COGS for that interpretation; shorter reporting periods require a separately adjusted days calculation. Average inventory and turnover must be positive.
Inventory Turnover questions
Is higher turnover always better?
No. Very high turnover can accompany inadequate stock and missed sales. Compare service levels and product availability.
Why use more than two inventory observations?
Seasonal inventory peaks can make the opening-and-closing average unrepresentative. This tool uses only the two entered balances.
Continue your calculation
For the next step, use the COGS Calculator or the Reorder Point Calculator. Review each tool’s input definitions before carrying a result into another calculation.
Frequently asked questions
Is this calculator free?
Yes. It runs in your browser and does not require an account.
How should I use the result?
Use the result as a planning estimate and verify business-critical decisions against your source records.