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Inventory Turnover Calculator

Evaluate how efficiently physical stock is sold and replenished over a period. Measuring stock turns helps identify obsolete inventory and optimize working capital.

Inventory turnover ratio (times/year)—
Days sales of inventory (DSI in days)—
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How it works

Inventory turnover ratio = cost of goods sold (COGS) ÷ average inventory. Days sales of inventory (DSI) = 365 ÷ turnover ratio. With annual COGS of 240,000 and average stock of 40,000, stock turns 6 times per year, taking approximately 60.83 days to sell through.

Questions

What does an inventory turnover ratio of 6 mean?

It means your business sold and replaced its average inventory holding six times during the measured annual timeframe.

How do I determine average inventory value?

Add beginning inventory and ending inventory for the period and divide by two: (beginning inventory + ending inventory) ÷ 2.

Why is higher inventory turnover usually beneficial?

Higher turns indicate rapid sales velocity, reducing warehouse holding expenses, inventory obsolescence risks, and tied-up working capital.

Results are estimates for planning. They are not tax, legal or financial advice.

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