Inventory Turnover Calculator

Inventory turnover measures how many times per year a business sells through its inventory. Divide COGS by average inventory. Higher turnover means faster cash conversion and less capital tied up in stock. Retail: 4-8 turnover typical. Fast fashion/grocery: 10-15. Heavy equipment/luxury: 1-3.

4M COGS against 500k average inventory = 8.0 turnover. That's fast - inventory sits 46 days on average before selling. Drop inventory to 250k same sales and turnover doubles to 16 (23 days). Raise it to 1M and turnover halves to 4 (91 days). Each stage ties up meaningfully different working capital.

Too high can signal stockouts. A supermarket running at 30x turnover is admirable if customers find what they want, dangerous if shelves are empty half the day. Sweet spot varies by industry and customer expectations. Track trend over time (improving or declining) and benchmark against direct competitors rather than abstract ideals.

A worked example

Try the defaults: cost of goods sold of 4,000,000, avg inventory of 500,000. The tool returns 8.00. You can adjust any input and the result updates as you type — no submit button, no reload. That's the real power here: seeing how sensitive the output is to one or two assumptions.

What moves the number most

The result responds to Cost of Goods Sold and Avg Inventory. Not every input has equal weight. Adjusting one input at a time toward extreme values shows which ones move the result most.

The formula behind this

Inventory turnover = COGS ÷ avg inventory. Days inventory = 365 ÷ turnover. Everything the calculator does is shown in the formula box below, so you can check the math against your own spreadsheet if you want.

What to do with a low result

A disappointing result is information, not a judgement. Pick the single input that dragged the figure down most and focus the next quarter on that one factor. Breadth-first improvement rarely works; depth-first on the worst input usually does.

What this doesn't capture

The score is a composite of the inputs you provide. Life context — job security, family obligations, health, housing — doesn't appear in the math but shapes the real picture. Use the number as a prompt, not a verdict.