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See how many times you sell through stock — and how many days it sits.
Turnover is the clearest single read on how hard your stock is working. Four turns a year means the average item sits for three months before it sells; twelve turns means it sits for one. The same warehouse, the same revenue, three times less cash frozen on the shelf.
Your numbers
Inventory turnover
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Times you sold and replaced inventory in the period.
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The formula
Turnover = COGS ÷ Average inventory · DIO = 365 ÷ Turnover
Higher turnover ties up less cash; DIO is the same thing in days.
What it means
Inventory Turnover — full definition
Read in the glossaryUse cost of goods sold, not revenue. Revenue includes margin, which inflates the ratio and makes you look faster than you are.
Average inventory means opening plus closing balance divided by two — a single month-end snapshot will mislead on any seasonal business.
Match the period. Quarterly COGS against quarterly average inventory, then multiply the turns by four if you want an annual figure.
A rising turnover figure is not automatically good news. It also rises when you are stocked out and cannot serve demand, so read it next to fill rate, never alone.
Blended, company-wide turnover hides everything interesting. Calculate it per category — the dead C-class tail is what drags the average down.
Worked example
COGS of 500,000 against average inventory of 125,000 gives 4.0 turns and a DIO of 91 days. Getting to 6 turns on the same COGS means average inventory of about 83,000 — roughly 42,000 released back into cash, without selling a single extra unit.
It is entirely sector-dependent. Fast-moving grocery runs 15–25 turns; industrial spares may be healthy at 2–3. Compare against your own trend and against direct competitors, not a universal benchmark.
They are the same fact. DIO in days tends to land better with finance and with operators because it is directly comparable to DSO and DPO in the cash conversion cycle.
Include it, then look at the number honestly. Excluding dead stock produces a flattering ratio that hides the exact problem you should be fixing.
This calculator works on one set of numbers. AWRA OpsHub keeps inventory turnover calculator results current across every item, supplier and location — automatically.
See how many days your cash is trapped between paying suppliers and getting paid.
Work out how many days your current stock will last at today’s demand.
Price what it costs you every year to keep stock sitting on the shelf.