Inventory Turnover Ratio Calculator

Enter your cost of goods sold and average inventory value to calculate your inventory turnover ratio.

Inventory Turnover Ratio Calculator

Calculate how many times inventory is sold and replaced over a period.

This is an estimate for general informational purposes only, not financial advice. What counts as a “good” turnover ratio varies significantly by industry — perishable goods retailers typically have much higher turnover than heavy equipment manufacturers.

Inventory turnover divides cost of goods sold (COGS) by average inventory value. A higher ratio generally indicates strong sales relative to inventory levels, while a low ratio can indicate overstocking or weak sales.

Example

  • With the default values shown above, this calculator returns: Inventory Turnover Ratio ≈ 8.00; Days Inventory Outstanding ≈ 45.6.

Frequently Asked Questions

What does a low turnover ratio mean?

A low ratio can suggest overstocking, weak sales, or obsolete inventory sitting unsold — though the ideal level varies significantly by industry and business model.

What is “Days Inventory Outstanding”?

It converts the turnover ratio into an average number of days inventory sits before being sold, calculated as 365 divided by the turnover ratio — a more intuitive way to think about inventory speed.

Related Calculators

Inventory Reorder Point CalculatorCalculates the inventory level at which you should reorder stock, based on daily usage, lead time and a safety stock buffer.Accounts Receivable Days Calculator (DSO)Calculate Days Sales Outstanding (DSO) — how long it takes to collect payment after a sale.Price Elasticity of Demand CalculatorCalculate how sensitive demand is to a change in price.
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