How to use the inventory turnover calculator
Enter the cost of goods sold and average inventory for the same period. The calculator shows the inventory turnover ratio, days of inventory on hand, the formula, and the values used in the calculation. You can then copy the result or download it as a text file.
How to calculate inventory turnover
- Enter the period total in Cost of goods sold (period).
- Enter the matching average in Average inventory. This value must be greater than zero.
- Choose a value in Currency symbol for the symbol shown beside the monetary values.
- Choose Annual (365 days), Quarter (90 days), or Month (30 days) in Period length (for days-on-hand).
- Select Calculate turnover to display the ratio, days on hand, formula, and assumptions table.
- Select Reset to clear the inputs, restore
$and Annual (365 days), hide the result, and clear any error.
After the calculation, select Copy result for plain text or Download result (.txt) to save a text file.
Inventory turnover and days-on-hand formulas
The calculator divides cost of goods sold by average inventory. It then divides the selected number of period days by the turnover ratio:
Inventory turnover = Cost of goods sold / Average inventoryDays of inventory on hand = Period days / Inventory turnover
For example, these values produce 6x turnover and 60.8 days of inventory on hand:
Cost of goods sold (period): $120,000
Average inventory: $20,000
Period length: Annual (365 days)
Inventory turnover ratio: 6x
Days of inventory on hand: 60.8 daysPrepare average inventory as (starting inventory + ending inventory) / 2 for the same period, then enter that result.
What period length and currency symbol change
Period length (for days-on-hand) changes the days-on-hand result only. Match it to the period covered by COGS and average inventory. The turnover ratio still uses the two entered values.
Currency symbol changes the displayed symbol. It does not convert the values or apply an exchange rate. The turnover ratio uses up to two decimal places, while days of inventory on hand uses one.
Inputs the calculator rejects
Cost of goods sold (period) must be a number of zero or more. Average inventory must be a number greater than zero because the turnover formula divides by it. Blank, nonnumeric, negative COGS, and zero or negative average inventory values are rejected.
Zero COGS is accepted. It produces 0x turnover, a dash for days of inventory on hand in the result, and n/a in the assumptions table and text output. When you change an input, the calculator hides the old result until you select Calculate turnover again.
Where inventory turnover comes up
- Enter annual COGS and average inventory to review stock movement, then copy the ratio and days on hand into a finance note.
- Select Quarter (90 days) when both inputs cover a quarter, then use Download result (.txt) with the period assumption.
- Calculate average inventory from starting and ending inventory, enter that figure, and check the assumptions table beside the result.
Choose a calculator for the inventory figures you have
Use this calculator when you have COGS and average inventory and need turnover plus days on hand. The Cost of Goods Sold Calculator derives COGS from starting inventory, purchases, and ending inventory. The Economic Order Quantity Calculator calculates order quantity from demand, ordering cost, and holding cost. The Inventory Planning Calculator combines reorder point, safety stock, EOQ, and turnover. Find other profitability, marketing, SaaS, and inventory tools in Business Calculators.
Frequently asked questions
How do I use the inventory turnover calculator?
Enter cost of goods sold and average inventory for the same period, choose the period length, and select Calculate turnover. The result shows the turnover ratio, days of inventory on hand, formula, and assumptions.
What is the inventory turnover formula?
Inventory turnover equals cost of goods sold divided by average inventory. The calculator uses the numeric values you enter and does not add live accounting data.
How do you calculate days of inventory on hand?
Days of inventory on hand equals the selected period days divided by the inventory turnover ratio. Choose Annual (365 days), Quarter (90 days), or Month (30 days) to match the input period.
Can average inventory be zero in an inventory turnover calculator?
Average inventory must be greater than zero because the turnover formula divides by it. The calculator rejects zero and negative values.
Does the inventory turnover calculator use live inventory data?
No live inventory data is used. The calculation runs in the browser from the numbers entered for COGS, average inventory, currency display, and period length.