Inventory Turnover Calculator
Inventory turnover shows how many times a year you sell through the stock you hold. A higher number means stock moves faster, and less cash sits on the shelves.
- Free
- Works offline after your first visit
- Saves on this device
- No sign-up
- Updated
How it works
Add the stock you had at the start and at the end of the year, then divide by two to get the average. Divide the cost of goods sold by that average to get the turns. Dividing 365 by the turns gives the days stock sits, on average, before it sells.
Worked example
With $240,000.00 of goods sold and an average stock of $50,000.00, you turn the stock 4.8 times a year, or about every 76 days.
Questions
What counts as cost of goods sold?
It is what the items you sold cost you to buy or make, such as materials and freight in. Your bookkeeping records usually show it.
Is a high turnover always good?
Usually, but very high turnover can mean you run short. Compare your number with others in your own trade, since norms differ a lot.
Why use the average stock?
Stock changes through the year. The average of the start and the end gives a fairer picture than either one alone.
More like this
- Employee Turnover Rate CalculatorYearly turnover rate and what it costs.
- Sales Tax CalculatorAdd sales tax to a price, or take it out of a total.
- Net Promoter Score CalculatorPromoter share minus detractor share, from survey counts.
- Markup CalculatorMarkup and margin from cost and selling price.
- Lead Time CalculatorExpected arrival from order date, production and shipping days.
- ROI CalculatorSimple and yearly return on an investment.