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Inventory Turnover Calculator

Inventory Turnover Calculator is part of Toolspire and is ready as soon as this page loads. COGS of ₹500 and average inventory of ₹100 is a turnover of 5, which is 73 days of stock. Sales at retail would overstate the turns.

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On this page

What you can do here

Turns and days together

The headline is the turnover count. The detail is how many days that count represents.

Average stock is your job

Opening plus closing, divided by two, is the usual average. The page will not halve a single snapshot unless you already did.

COGS only

The label says cost of goods sold so a revenue figure is a known mistake, not a hidden option.

The sequence

How to use the Inventory Turnover Calculator

  1. 1

    Match the period

    A year of COGS needs a year-average stock. A month of COGS against a year of stock looks wonderfully fast and is wrong.

  2. 2

    Stay at cost

    If the stock ledger is at cost, the sales line you want is cost of goods, not invoices.

  3. 3

    Read 73 as the sample’s days

    Five turns in a 365-day year is 73 days, not 73 turns.

Worth knowing

  • Inventory Turnover Calculator on Toolspire: turnover = COGS ÷ average inventory.
  • 500 ÷ 100 = 5 turns. Days on hand = 365 ÷ 5 = 73.
  • Use cost, not selling price, for both boxes. Retail sales against cost of stock mixes two units.
  • A 365-day year is the divisor. A 360-day bank year is not used.

Turns are the reciprocal of days

Five times a year means the average stock is sold, at cost, every 365/5 days. That is 73 days. A seasonal business can show a healthy annual turn and still be buried in stock in one quarter, because the average hides the peak. The page uses the two numbers you type and a 365-day year.

FAQ

Questions about Inventory Turnover Calculator

Where does Inventory Turnover Calculator run?

Inventory Turnover Calculator runs in this tab on Toolspire. What you type or drop in is not sent to us and is not stored on a server.

What is turnover when COGS is 500 and stock is 100?

5 turns, or 73 days of inventory.

Why not divide sales by stock?

Sales include margin. Turnover at retail is a different, usually larger, number. This page is the cost version.

What is average inventory?

Often (opening stock + closing stock) ÷ 2. Type that average, not both ends.

Why 365 days?

So days = 365 ÷ turns. A 360-day convention would make the sample 72 days.

Keep going

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