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Inventory Turnover Calculator
See how efficiently your stock moves. Enter your cost of goods sold and average inventory, then press Calculate to get the turnover ratio and the days each unit sits on the shelf.
Written by TopicDrill Editorial Team·Updated June 2026
Cumulative stock cycles across the year
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How the inventory turnover calculator works
The ratio comes from one simple division: cost of goods sold for the period divided by your average inventory at cost. The answer tells you how many complete times you sold through and refilled your shelves. A higher number means stock is moving briskly and less cash is tied up sitting in storage.
The chart spreads that result evenly across twelve months so you can picture the pace of cycling. Each bar is the running total of turns by that month, climbing steadily to your full annual ratio by December.
A quick example
Suppose your cost of goods sold last year was 500,000 dollars and your average inventory was 80,000 dollars. Dividing gives a turnover of 6.25 times. Spread over 365 days that works out to roughly 58 days inventory on hand, meaning a typical item sells about two months after it lands in your warehouse.
Things to keep in mind
A very high ratio is not automatically better. Pushed too far it can mean you are constantly running out of stock and losing sales, so balance turnover against service levels. For the accounting definitions behind the figures, see the SEC filings of public retailers. To see how slow stock ties up cash, pair this with our future value calculator.
Frequently asked questions
What is a good inventory turnover ratio?
It depends heavily on the industry. Grocery and fast fashion can turn stock dozens of times a year, while heavy machinery or jewellery may turn only a few. As a rough guide, a ratio between four and six suits many general retailers, but always compare against peers in your own sector.
How do I find my average inventory?
Add the inventory value at the start of the period to the value at the end, then divide by two. Using an average smooths out seasonal spikes so a single busy month does not distort the ratio. For more precision you can average several monthly snapshots instead.
Why use cost of goods sold instead of sales revenue?
Inventory on your balance sheet is recorded at cost, not at the price you sell it for. Dividing sales revenue by inventory mixes retail prices with cost figures and inflates the ratio. Cost of goods sold keeps both the top and bottom of the formula on the same cost basis.
What does days inventory on hand tell me?
It converts the turnover ratio into the average number of days a unit sits in your warehouse before it sells. Take the days in the period and divide by the turnover ratio. Fewer days usually means leaner working capital, while a rising number can signal slow movers or overstocking.
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