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Inventory Turnover Calculator
Compute inventory turnover and average days inventory held from COGS and average inventory value. Free.
How to read
Turnover = COGS ÷ average inventory. Days inventory = 365 ÷ turnover. Higher turnover means faster-selling stock (generally good), but too high can mean frequent stockouts.
Inventory turnover
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Understanding inventory turnover
Inventory turnover
How many times inventory sells and is replaced in a year. Turnover = COGS ÷ average inventory value. A high number means stock sells quickly.
Days inventory
The average number of days stock is held before selling = 365 ÷ turnover. Fewer days means capital returns to cash faster.
Too high is also a risk
Very high turnover can mean stock is too thin and often runs out. The ideal is balanced: fast-selling without sacrificing availability.
FAQ
Frequently asked questions
How do I calculate inventory turnover?
Turnover = annual COGS ÷ average inventory value. E.g. COGS Rp600M, average inventory Rp100M → 6 times/year, meaning stock turns over 6 times a year.
What is days inventory?
The average time stock is held before selling = 365 ÷ turnover. A turnover of 6 → about 61 days. The smaller, the faster stock turns into cash.
What's a good inventory turnover?
It depends heavily on industry. Fresh/FMCG goods have high turnover, durables lower. Compare with your industry average and your own trend over time.
What's the impact of low turnover?
Capital is tied up in slow-selling stock, with risk of obsolescence/damage and high storage cost. Low turnover often signals a need to review purchasing and promotion.
Use COGS or sales to compute?
Ideally COGS, since inventory is recorded at cost. If COGS isn't available, sales can approximate it, but the figure tends higher because it includes margin.
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