Inventory Turnover Calculator
Measure how many times your business has sold and replaced inventory during a specific period.
Fill in the fields above and click Calculate to see your results.
How to use
Enter your cost of goods sold for the period (use a full year for the standard ratio) plus beginning and ending inventory values. The calculator returns your turnover ratio — how many times you sold through your average inventory — and the average number of days stock sits before selling.
Read the two numbers together: a ratio of 6 means inventory turns roughly every 61 days. Too low ties up cash in slow stock and raises the risk of obsolescence and markdowns; too high for your category means you are likely losing sales to stockouts. Compare by category, and investigate individual SKUs — a healthy average often hides dead items.
How it's calculated
Inventory Turnover Ratio
Days to Sell Inventory
Examples
Online shoe store, one year
- Cost of Goods Sold (COGS):500,000,000
- Ending Inventory:60,000,000
- Beginning Inventory:40,000,000
Result
- Days to Sell Inventory:36.5
- Inventory Turnover Ratio:10
Average inventory of 50M₫ against 500M₫ annual COGS gives 10 turns — stock sells through every 37 days, excellent for footwear (category norm 4–6). Watch stockouts on best sellers: turnover this high sometimes means under-buying.
Furniture showroom, one year
- Cost of Goods Sold (COGS):300,000,000
- Ending Inventory:160,000,000
- Beginning Inventory:140,000,000
Result
- Days to Sell Inventory:182.5
- Inventory Turnover Ratio:2
Two turns a year — each piece sits about six months, normal for furniture (norm 1–3) but hard on cash flow. Floor models, deposits on made-to-order items, and clearing discontinued lines are the standard levers here.
Industry Benchmarks
| Metric | Typical Range |
|---|---|
| General retail typically holds 60–90 days of stock. Perishables need far less; big-ticket durables can justify more. | 60–90 days |
| Annual turns by category: grocery 12–20+, fashion 4–6, electronics 6–8, furniture & jewelry 1–3. Compare within your category only. | 4–6 turns/year |
Data source: Retail industry benchmarks (CSIMarket / NYU Stern sector data)
Frequently Asked Questions
What is a good inventory turnover ratio?
Is a higher turnover always better?
Why use average inventory instead of ending inventory?
How can I improve a low turnover ratio?
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