Inventory Turnover Calculator

Inventory turnover ratio is cost of goods sold (COGS) divided by average inventory value at cost. Days inventory outstanding is the period length (365 days by default) divided by that ratio, so it shows the average number of days stock sits before it sells.

It depends heavily on the industry. Many retail and ecommerce businesses aim for a ratio of roughly 4 to 8 (turning stock over every 45 to 90 days). Fast-moving groceries can run far higher, while high-ticket or seasonal goods are often lower. Compare against your own niche and history rather than a single benchmark.

Use cost of goods sold, not sales revenue. Average inventory is recorded at cost, so dividing by COGS keeps both sides on the same cost basis. Using revenue would inflate the ratio because it includes your markup.

A common approach is to add your beginning inventory and ending inventory for the period and divide by two. For a smoother figure you can average several month-end balances. Use the value at cost, matching how COGS is measured.

Days inventory outstanding (DIO), also called days sales of inventory, estimates how many days it takes on average to sell your current stock. A lower number means inventory converts to sales faster, freeing up cash; a high number can signal overstocking or slow-moving products.

No. The calculation runs entirely in your browser. Nothing you enter is uploaded, logged or stored.