Inventory Turnover Calculator

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

Cost of goods sold (period)

value

Average inventory value

value

Inventory turnover

—

Times you sold and replaced inventory in the period.

Days inventory outstanding —

Updates as you type · nothing leaves your browser

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 glossary

How to use it

1
Use cost of goods sold, not revenue. Revenue includes margin, which inflates the ratio and makes you look faster than you are.
2
Average inventory means opening plus closing balance divided by two — a single month-end snapshot will mislead on any seasonal business.
3
Match the period. Quarterly COGS against quarterly average inventory, then multiply the turns by four if you want an annual figure.

Where it goes wrong

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

Four turns and what they cost

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.

Common questions

What is a good inventory turnover?

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.

Turnover or DIO — which should I report?

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.

Should obsolete stock be included?

Include it, then look at the number honestly. Excluding dead stock produces a flattering ratio that hides the exact problem you should be fixing.

Let AWRA do this on your live data

This calculator works on one set of numbers. AWRA OpsHub keeps inventory turnover calculator results current across every item, supplier and location — automatically.

Book a demo See pricing

More free tools

All 18 calculators