Free tool

Inventory turnover with your numbers

Q: How is inventory turnover calculated?

Divide the cost of goods sold for the period by the average inventory, which is the average of opening and closing stock. The result is a number of times: 6 means the stock was sold and replenished six times. The full explanation is in the inventory turnover glossary entry.

Enter cost of goods sold and opening and closing inventory, and get turnover and days of inventory instantly, with a scenario of how much capital less stock frees up.

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Preloaded values are editable references. The formula is in plain sight. The result comes from your data, not from promises.

CurrencyChanges the format only; it does not convert values.

Cost of goods sold for the periodeditable reference

At cost, not at selling price: with the margin included the turnover comes out inflated.

Inventory at the start of the periodeditable reference

Valued at cost.

Inventory at the end of the periodeditable reference

Valued at cost.

Days in the periodeditable reference

days

365 for a year, 90 for a quarter, 30 for a month.

Turnover for the period

6.0 times

Times the stock was sold and replenished in the period.

Days of inventory

61 days

How often the stock is renewed, on average.

Average inventory

$200,000

Between the start and the end of the period.

Scenario with less stock

What happens if average inventory goes down and cost of goods sold stays the same.

Inventory reduction to simulateeditable reference

With the same cost of goods sold.

With 10% less stock, turnover goes to 6.7 times, inventory lasts 55 days and $20,000 of working capital is freed up.

Result, scenario, assumptions and formula in one PDF. The calculation on screen is free and needs no sign-up.

How do we calculate this?

average inventory = (opening inventory + closing inventory) / 2
turnover          = cost of goods sold / average inventory
days of inventory = days in the period / turnover
scenario          = same cost of goods sold with a lower average inventory

With your current data

Cost of goods sold: $1,200,000
Opening inventory: $180,000
Closing inventory: $220,000
Days: 365 days
Inventory reduction: 10%

The result is an estimated potential based on your data, not a promise of results.

Send this link to whoever signs off on the budget.

About this tool

How to read inventory turnover

Turnover tells you how many times the stock was sold and replenished in a period. On its own it is not enough: it is best read in days and against your own history.

Turnover and days of inventory, the same measure

Turnover speaks in times and days of inventory speak in time. They are the same math turned around: with 365 days and a turnover of 6, the stock lasts about 61 days.

For purchasing and the warehouse, days are usually clearer. For finance, turnover connects to working capital: money sitting in merchandise is not available for anything else.

Why it pays to measure it by category

A healthy total can hide products that do not move. Measuring by category, branch or SKU shows where there is overstock and where there is a risk of a stockout, the opposite problem, which costs sales.

With well-sized safety stock, inventory can come down without running out of the products that move fastest.

From spreadsheet to dashboard

Calculating turnover once is simple; keeping it up every week by category is not. Metrix consolidates sales and stock and shows turnover and days of inventory without building the spreadsheet by hand.

Frequently asked questions

How is inventory turnover calculated?

Divide the cost of goods sold for the period by the average inventory, which is the average of opening and closing stock. The result is a number of times: 6 means the stock was sold and replenished six times. The full explanation is in the inventory turnover glossary entry.

Why use cost of goods sold and not revenue?

Because inventory is valued at cost. Dividing revenue leaves the margin in, so turnover comes out higher than it really is, and it cannot be compared across businesses with different margins.

How do you turn turnover into days of inventory?

Divide the days in the period by the turnover. With 365 days and a turnover of 6, the stock lasts about 61 days on average. Days are usually clearer for purchasing and the warehouse.

What is a good turnover?

It depends on the business: a supermarket and a hardware store do not compare. The useful reference is your own, the same category in the previous period, and the target the business sets. That is why the calculator shows no ideal range.

What does Vantegrate do with my data?

The calculation runs in your browser. If you request the report, along with your name, email and company we store the values entered and the result, to send you the link to your calculation and Vantegrate updates, which you can stop anytime.

Want to see these numbers in your real operation?

A 30-minute demo with your case, no commitment. Or message us on WhatsApp and let's talk it through.

Let's talk on WhatsApp Book a demo

Francisco Morales, co-founder, takes your call. We reply on WhatsApp within 4 business hours, no strings attached.

Keep exploring

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Turnover for the period

6.0 times

Inventory turnover with your numbers

How to read inventory turnover

Turnover and days of inventory, the same measure

Why it pays to measure it by category

From spreadsheet to dashboard

Frequently asked questions

How is inventory turnover calculated?

Why use cost of goods sold and not revenue?

How do you turn turnover into days of inventory?

What is a good turnover?

What does Vantegrate do with my data?

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