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Inventory turnover calculator

How many times a year your stock sells through, and how many days a typical item sits on the shelf before it does.
Inventory turnover
5×
Days of inventory
73 days
Average inventory
US$24,000.00

How it is calculated

Average inventory = (opening + closing inventory) ÷ 2, both at cost.

Inventory turnover = cost of goods sold ÷ average inventory.

Days of inventory = 365 ÷ turnover.

Questions

What is a good inventory turnover?

It varies by product: groceries turn dozens of times a year, furniture a few. Rising turnover with steady margins usually means less cash tied up in stock.

Why use cost of goods sold rather than sales?

Because inventory is valued at cost. Dividing sales by inventory at cost mixes two measures and overstates the turnover by your markup.

How do I improve it?

Buy closer to demand, clear slow movers before they become dead stock, and keep safety stock where it earns its place.

If you run WooCommerce

StockPulse flags the WooCommerce products that have stopped selling, which is where low turnover usually hides. StockPulse is our plugin; the calculator above works the same whether you use it or not.

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