# Inventory Turnover Calculator

URL: https://speedycalculator.com/calculators/finance/inventory-turnover/
Last updated: 2026-10-25

> The inventory turnover calculator works out how many times a company sells and replaces its inventory in a period – cost of goods sold divided by average inventory – and the average days to sell inventory.

## Inputs

- Cost of goods sold
- Beginning inventory
- Ending inventory
- Days in the period

## Results

- Inventory turnover
- Days to sell inventory
- Average inventory

## Formula

```
Inventory turnover = COGS ÷ average inventory
Average inventory = (beginning + ending) ÷ 2
Days to sell = days in period ÷ turnover
```

## Explanation

High turnover means strong sales or lean inventory; low turnover can mean overstocking or weak demand. Compare with competitors – supermarkets turn stock far more often than furniture stores.

### How to use the Inventory Turnover Calculator

- **Cost of goods sold**
- **Beginning inventory**
- **Ending inventory**
- **Days in the period**

Results update as you type, and every field accepts the units shown in its menu.

### How it works

Enter cost of goods sold and beginning and ending inventory.

### Tips

- Use consistent periods (a year or a quarter) for flow figures and period-end values for balances.
- Average opening and closing balances when a ratio mixes a flow with a stock.
- Benchmark against competitors in the same industry.
- Read the ratio together with others – profitability, liquidity and efficiency tell different stories.

### Common mistakes to avoid

- Using sales instead of cost of goods sold for inventory ratios.
- Mixing gross, operating and net profit.
- Ignoring one-off items that distort a single year.

### Inputs explained

FieldWhat to enterCost of goods soldAmount in your currencyBeginning inventoryAmount in your currencyEnding inventoryAmount in your currencyDays in the periodA number

### What each result means

- **Inventory turnover** = [Cost of goods sold]÷(([Beginning inventory] + [Ending inventory])÷2)
- **Days to sell inventory** = [Days in the period]÷[Inventory turnover]
- **Average inventory** = ([Beginning inventory] + [Ending inventory])÷2

### Example values

How the main result changes when **Cost of goods sold** changes and everything else stays at the example values above:

Cost of goods soldInventory turnover450,0003675,0004.5900,00061,125,0007.51,350,00091,800,00012

## Worked example

Inputs — Cost of goods sold: $900,000; Beginning inventory: $140,000; Ending inventory: $160,000; Days in the period: 365.

Results — **Inventory turnover = 6**; Days to sell inventory = 60.8 days; Average inventory = $150,000.00.

## FAQ

**What is a good inventory turnover ratio?**
5–10 for many retailers; it varies widely by industry.

**Should I use sales or COGS?**
COGS is more accurate because inventory is valued at cost.

**How can I improve inventory turnover?**
Stock less slow-moving inventory and improve demand forecasting.

**What formula does the Inventory Turnover Calculator use?**
Inventory turnover = COGS ÷ average inventory.


## Sources

- [Corporate Finance Institute – financial ratios](https://corporatefinanceinstitute.com/)