Calculate inventory turnover, inventory days, and average inventory from COGS and inventory balances
| Turnover ratio | Category | What it means |
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| Metric | Value | Notes |
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Two businesses can report identical COGS and wildly different inventory performance. The one turning stock twelve times a year ties up far less capital than the one turning it twice. Inventory turnover captures that difference in a single number.
It’s one of the oldest efficiency ratios in the analyst toolkit, and it still earns its place. Slow turnover means cash is trapped in warehouses, storage costs pile up, and obsolescence risk climbs. Very fast turnover can signal strong demand, but it can also mean the business is under-stocked and losing sales. The calculator’s interpretation scale covers both ends.
Select your currency from the dropdown.
Enter cost of goods sold for the period.
Add beginning inventory. That’s the balance at the start of the period.
Enter ending inventory from the end of the period.
Set the period length in days. Use 365 for annual, 90 for quarterly, 30 for monthly.
Read inventory turnover from the hero result.
Check inventory days in the context line.
Review the interpretation table to see where your ratio sits.
Average inventory smooths out any big swings between the start and end of the period. It’s the simple midpoint between the two balances.
Formula: Average Inventory = (Beginning Inventory + Ending Inventory) ÷ 2
Formula: Inventory Turnover = Cost of Goods Sold ÷ Average Inventory
Formula: Inventory Days = Period Days ÷ Inventory Turnover
A turnover of 8× over 365 days means inventory days of 45.6. That’s how long stock sits before it’s sold, on average. The calculator also annualizes turnover if you enter a period shorter than a year, so you can compare a quarterly figure against an annual benchmark.
If average inventory is zero, the ratio is undefined and the calculator flags it rather than dividing by zero.
A home-goods retailer reports $1,860,000 in COGS for the year. Beginning inventory was $340,000. Ending inventory was $295,000. Period is 365 days.
Average inventory: ($340,000 + $295,000) ÷ 2 = $317,500.
Inventory turnover: $1,860,000 ÷ $317,500 = 5.86×.
Inventory days: 365 ÷ 5.86 = 62.3 days.
COGS per day: $1,860,000 ÷ 365 = $5,096.
A 5.86× turnover falls in the below-average band. For a home-goods retailer, that’s not alarming. Furnishings and decor aren’t grocery items, and customers take time to decide. But if the same ratio showed up in a consumer electronics business, it would signal stale stock.
Cost of goods sold divided by average inventory. Average inventory is beginning inventory plus ending inventory, divided by two.
It varies by industry. Grocery and consumer staples run 10× to 20× per year. Specialty retail and durables run 3× to 6×. Heavy equipment and luxury goods run under 3×.
Divide the period length in days by the inventory turnover ratio. A turnover of 8× over 365 days means inventory sits for about 46 days.
Ending inventory is a single point in time and can be distorted by seasonality or one-time purchases. The average smooths those swings and gives a more representative figure.
Yes. Very high turnover can mean the business is under-stocked and missing sales. Frequent stockouts also damage customer relationships and lead to expedited shipping costs.
It means stock sits for a long time before selling. That ties up cash, raises storage costs, and increases the risk of obsolescence. It can also signal weak demand or poor buying decisions.
They measure the same thing. Turnover counts how many times stock cycles. DSI measures how long it takes. DSI equals period days divided by turnover.
COGS. Revenue includes markup and would inflate the ratio. COGS is the actual cost of the inventory that was sold, so it pairs correctly with an inventory balance.
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