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Inventory turnover calculator
Your turnover ratio, average inventory and days to sell, from cost of goods sold and your opening and closing stock.
- Results
- Turnover, days to sell
- Period
- Year, quarter or month
- Price
- Free, no sign-up
Inventory turnover
3×
- Average inventory
- £10,000.00
- Days to sell
- 122 days
Over one year (365 days).
Retailed’s reports show your turnover and aging stock, so you see what slows you down.
Start freeShort answer
What is the inventory turnover formula?
Inventory turnover = cost of goods sold ÷ average inventory, where average inventory = (opening stock + closing stock) ÷ 2, both at cost. A shop that sold stock that cost 30,000 in a year and held 10,000 on average turned its inventory 3 times.
How to calculate inventory turnover, step by step
- Add up what the items you sold in the period cost you: that is your cost of goods sold (COGS).
- Value your stock at cost at the start and at the end of the period.
- Average the two: (opening + closing) ÷ 2.
- Divide COGS by the average inventory. Then divide the days in the period by the result to get the days to sell.
Example: a reseller starts the year with 8,000 of stock at cost and ends it with 12,000. The items sold during the year cost 30,000. Average inventory is 10,000, turnover is 30,000 ÷ 10,000 = 3, and stock takes 365 ÷ 3 ≈ 122 days to sell.
Turnover ratio, turns and days to sell
“Inventory turns” is the same number as the turnover ratio. Days to sell (also called days sales of inventory, DSI) is the same idea the other way up: how long the average item waits for a buyer. A higher turnover means fewer days and less cash tied up in stock.
Frequently asked questions
General4 questions
How do I calculate days to sell inventory?
Days to sell = days in the period ÷ inventory turnover. A turnover of 3 over a 365-day year means an item sits for about 122 days on average before it sells.
Why use cost of goods sold and not sales?
Stock is valued at what you paid for it, so it should be compared with the cost of what you sold, not with the selling price. Using sales mixes in your margin and makes the turnover look higher than it is.
What is a good inventory turnover ratio?
It depends on what you sell. Fast-moving, low-price items turn many times a year; rare or high-value pieces turn slowly by design. Compare your own figure month to month: a rising turnover means stock is selling faster, a falling one means cash is sitting on the shelf.
How can I improve my inventory turnover?
Buy closer to demand, reprice or bundle items that have sat too long, and stop rebuying what sells slowly. Tracking how many days each item has been in stock shows you which pieces hold the ratio down.
See which items slow your stock down
Retailed tracks the cost of every item and reports turnover and aging stock. Free for up to 25 active items.