Business
Inventory Turnover Calculator
Enter cost of goods sold and average inventory value to see turns and days on hand.
How fast does stock turn?
Inventory turnover measures how many times stock sells through relative to the average inventory you hold. Enter cost of goods sold (COGS) for the period and average inventory value; turnover = COGS ÷ average inventory, and days of inventory ≈ days in period ÷ turnover. Higher turns usually free cash, but chasing turns too hard can cause stockouts and expensive expedited freight — compare within your category rather than against unrelated industries. Average inventory is often (opening + closing) ÷ 2 for the period you chose. For related working-capital views see the cash conversion cycle and reorder point tools.
Worked example
COGS £240,000 ÷ £40,000 average inventory = 6.00× turns. On a 365-day basis that is about 60.8 days of inventory.
Limits and assumptions
Accounting estimate — definitions of COGS and average stock vary by policy (FIFO, weighted average, what is capitalised). Not a demand forecast.
Frequently asked questions
What does COGS mean?
Cost of goods sold — the accounting cost of inventory that left as sales in the period, not retail selling price.
How should I calculate average inventory?
A common simple method is (opening inventory + closing inventory) ÷ 2 for the same period as COGS.
Is a higher turnover always better?
Not if you stock out, lose sales or pay rush freight. Benchmark peers in your category.
Should consignment stock be included?
Usually only include inventory you own on the balance sheet; consignment rules differ by agreement.