Free ForeverNo SignupStock EfficiencyUpdated 2026

Inventory Turnover Calculator

Calculate how efficiently you're turning inventory into sales — and how many days of stock you're holding.

Inventory Turnover = Cost of Goods Sold ÷ Average Inventory Value. A ratio of 6× means you sell and replenish your entire inventory 6 times per year — every 60 days. Too low means cash is tied up in slow-moving stock. Too high means stockout risk.

Annual Cost of Goods Sold (COGS)

Total cost of products sold in the year

Beginning Inventory Value

Inventory value at the start of the period

Ending Inventory Value

Inventory value at the end of the period

The Formula

Turnover = COGS ÷ ((Beginning + Ending Inventory) ÷ 2)

In plain English

Turnover = COGS / average inventory. Days on hand = 365 / turnover.

Worked Example

COGS $600K, avg inventory $90K. Turnover = 600K/90K = 6.7×. Days on hand = 365/6.7 = 55 days.

Optimising Inventory Turnover

Slow-moving inventory is expensive: you're paying for storage, insurance, and the opportunity cost of capital tied up in stock. The 20/80 rule applies: 20% of SKUs typically drive 80% of inventory cost. Identify and ruthlessly manage the slow 80%.

Demand forecasting is the core tool. Use 12 months of sales history (seasonality-adjusted) to set reorder points and safety stock levels. Modern e-commerce platforms and tools make this data-driven approach accessible even for small sellers.

Inventory Turnover Benchmarks by Category (2026)

Category	Low	Average	High
Apparel	2–3×	4–6×	8×+
Consumer electronics	4×	6–8×	12×+
Grocery / FMCG	8×	15–25×	30×+
Furniture / home	1–2×	3–4×	6×+

Source: Shopify Inventory Benchmark Report 2025 · NRF Retail Operations Study

Common Mistakes

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Using retail price instead of COGS

Inventory turnover uses COGS (cost price), not retail price. Using retail price inflates the ratio and makes turnover appear better than it is.

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Applying one target ratio across all SKUs

Fast fashion turns 8–12×, luxury 2–3×. Set category-appropriate targets. A 3× turnover for electronics is poor; for fine jewellery it's acceptable.

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Ignoring seasonality

Seasonal businesses (holiday, summer) naturally have lower turnover in off-season. Track turnover month-over-month and compare same periods year-over-year, not just annual averages.