Inventory Turnover Calculator
This inventory turnover calculator shows how fast your stock sells through. Enter annual cost of goods sold and your average inventory value to get inventory turns per year, days of supply, and inventory as a percentage of COGS. Use it to spot overstocked products tying up cash — or fast movers at risk of stocking out.
Cost of goods sold over the last 12 months.
Average inventory value over the same 12 months (beginning + end ÷ 2 at minimum).
Inventory turns per year
4
- Days of supplyHow long current stock lasts at current sales pace.
- 91.3
- Turns per month
- 0.33
- Inventory as % of COGSShare of annual product cost sitting in stock.
- 25%
How it was calculated
- Turns: $120000.00 ÷ $30000.00 = 4.00x per year.
- Days of supply: 365 ÷ 4.00 = 91.3 days.
- Inventory is 25.0% of annual COGS.
How it works
Inventory turnover = annual COGS ÷ average inventory value. $120,000 COGS on $30,000 average stock is 4 turns per year.
Days of supply = 365 ÷ turnover. Four turns means stock lasts about 91 days at the current pace.
Average inventory should be the mean over the period — at minimum (beginning + ending) ÷ 2 — not a single snapshot.
Higher turns free cash but raise stockout risk; lower turns are safer but trap working capital.
Worked examples
$120,000 COGS on $30,000 average inventory
Turnover = 4x per year. Days of supply = 365 ÷ 4 = 91.3 days. Inventory is 25% of annual COGS — roughly 3 months of stock, reasonable for steady sellers.
$500,000 COGS on $50,000 average inventory
Turnover = 10x per year. Days of supply = 36.5 days. Lean and fast — great for cash flow, but a supply hiccup means empty shelves within weeks.
How to measure
- Use 12 months of COGS to smooth seasonality; monthly snapshots mislead seasonal sellers.
- Average at least beginning and ending inventory — better, the average of 12 month-ends.
- Value inventory at cost, not retail, to match COGS.
- Run it per product or category; a blended company figure hides dead stock behind winners.
- Exclude in-transit and consignment stock unless you own it.
Assumptions & limitations
Planning estimate
- COGS and inventory must cover the same period and the same product set.
- Seasonality is smoothed out; the result is an annual average, not a current snapshot.
- Valuation method (FIFO, average cost) affects the inputs — be consistent period to period.
- This is a planning estimate, not financial advice.
Frequently asked questions
It depends on category: grocery and fast fashion often exceed 8–12x, while furniture or luxury goods may be healthy at 2–4x. Compare against your own history and category norms — the trend matters more than the absolute number.
How long your current stock lasts at the current sales pace: 365 ÷ turnover. Ninety days of supply means you can stop ordering for three months. Use it to time reorders against supplier lead times.
Not always. Very high turnover frees cash but leaves no buffer — one delayed shipment and you stock out, losing sales and ranking. The sweet spot balances carrying cost against stockout risk for your lead times.
At minimum: (beginning inventory + ending inventory) ÷ 2 for the period. Better: average the 12 month-end values. Always value at cost to match COGS, and cover the same products as your COGS figure.
Overbuying, slow-moving or obsolete items, too many SKUs, and weak demand. The fix starts with identifying dead stock (zero sales in 90+ days) and marking it down or bundling it — then tightening reorder quantities.