Free Inventory Turnover Calculator
See how fast your stock moves
Enter your cost of goods sold and average inventory value to instantly find your inventory turnover ratio and days inventory outstanding — the two key metrics of stock efficiency.
What Is Inventory Turnover?
Inventory turnover measures how many times your business sold and restocked its entire inventory during a period. A high turnover means products are selling quickly and capital is not tied up in slow-moving stock. A low turnover can indicate overstocking, poor sales, or products that need to be discounted or discontinued. This free calculator also shows Days Inventory Outstanding (DIO) — how many days on average a product sits in storage before it sells.
How to Calculate Inventory Turnover
Step 1 — Enter Cost of Goods Sold (COGS)
COGS is the total cost of all products you sold during the period (month, quarter, or year). Find this on your profit & loss statement or sum up (purchase cost × units sold) for each product.
Step 2 — Enter Average Inventory Value
Average inventory = (Opening stock value + Closing stock value) ÷ 2. Use cost price values, not selling price. If you only have one figure, use it as-is.
Step 3 — Read Turnover Ratio & Days
The turnover ratio shows how many times you sold and replaced your inventory in the period. Days Inventory Outstanding (DIO) shows the average number of days stock sits before selling.
Who Uses This Inventory Turnover Calculator?
Business Owners
Quickly measure how efficiently your inventory is moving to identify slow-moving products and reduce carrying costs.
Accountants & CFOs
Calculate and benchmark turnover ratios for quarterly and annual financial reviews.
Retail Managers
Compare turnover across product categories to decide which items to promote, discount, or discontinue.
Investors & Lenders
Assess inventory efficiency as part of business health analysis before funding or lending decisions.
Frequently Asked Questions
What is inventory turnover ratio?
Inventory turnover ratio = COGS ÷ Average Inventory. It shows how many times your entire inventory was sold and replenished during a period. A higher ratio means faster-moving stock.
What is a good inventory turnover ratio?
It varies by industry. Grocery and FMCG typically target 12–15× (monthly restocking). Fashion may be 4–6×. Electronics 4–8×. Compare to industry peers rather than a universal benchmark.
What is Days Inventory Outstanding (DIO)?
DIO = 365 ÷ Inventory Turnover Ratio. It tells you the average number of days products sit in stock before being sold. Lower DIO means faster sales and less capital tied up in inventory.
What does a low inventory turnover mean?
A low ratio suggests slow-moving or overstocked inventory, excess carrying costs, potential obsolescence, or poor sales. It may mean you're purchasing too much or your products aren't selling well.
Should I use cost price or selling price for this calculation?
Use cost price (COGS) for both COGS and average inventory for an accurate ratio. Using selling price for inventory inflates the ratio and makes it incomparable to industry benchmarks.
Is this inventory turnover calculator free?
Yes, 100% free with no account required.