Inventory Turnover Calculator
Inventory turnover measures how efficiently you sell and replace inventory. High turnover = lean, efficient operations.
How It Works
Divides annual COGS by average inventory to get turnover ratio, then calculates Days Sales of Inventory (DSI) and weeks of supply.
Formula
Turnover = COGS ÷ Average Inventory
DSI = 365 ÷ Turnover
Avg Inv = (Beginning + Ending) ÷ 2
Example
COGS $500K, Avg Inventory $100K:
Turnover = 5×. DSI = 73 days.
When to Use This Calculator
Use quarterly to benchmark against your industry, identify slow-moving stock, and optimize reorder timing.
Common Mistakes to Avoid
- Using revenue instead of COGS — turnover uses cost basis.
- Using only ending inventory — average smooths seasonal fluctuations.
- Wrong industry benchmark — grocery 12–15× normal; furniture 2–4× fine.
Frequently Asked Questions
Good inventory turnover?
Grocery: 12–15×. Clothing: 4–6×. Furniture: 2–4×. Electronics: 6–8×.
What is DSI?
Days of sales your current stock supports. Lower = faster moving inventory.
How to improve turnover?
More promotions, smaller/more frequent orders, or discontinue slow-moving SKUs.
What is EOQ?
Economic Order Quantity — minimizes total holding and ordering costs.
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Last Updated: July 4, 2026