Calculate how many times your inventory sells through per year, and how many days the average item sits before it sells. Inventory turnover is the fastest single read on whether your cash is working or parked on a shelf.
Enter your cost of goods sold and inventory values for the same period (typically 12 months).
COGS for the period, not revenue
Inventory value at period start
Inventory value at period end
Average inventory
$30,000
(beginning + ending) ÷ 2
Inventory Turnover Ratio
4.0×
Times inventory sold through per year
Days to sell inventory
91 days
365 ÷ turnover ratio
Interpretation: Your inventory turns over 4.0× per year — on average, an item sits for 91 days before it sells. A ratio between 2 and 6 is a healthy range for most product businesses. Compare against your industry and prior periods to confirm the trend.
Inventory Turnover = COGS ÷ Average Inventory
Average Inventory = (Beginning + Ending) ÷ 2 · Days to Sell = 365 ÷ Turnover
The cost of the inventory you actually sold in the period. Use COGS, not revenue — inventory is valued at cost.
Smooths out seasonal peaks: average your beginning and ending inventory value for the same period.
365 divided by the ratio — the average number of days an item sits on the shelf before it sells.
| Annual COGS | $120,000 |
| Beginning inventory | $35,000 |
| Ending inventory | $25,000 |
| Average inventory | ($35,000 + $25,000) ÷ 2 = $30,000 |
| Inventory turnover | $120,000 ÷ $30,000 = 4.0× |
| Days to sell | 365 ÷ 4.0 = 91 days |
This business sells through its average inventory four times a year — the typical item sits about three months. Whether that is good depends on the industry: fine for furniture, slow for consumables.
Typical annual ranges by category — treat these as orientation, and compare against your own history first:
| Business type | Typical turnover | Days to sell |
|---|---|---|
| Grocery / perishables | 12–25× | 15–30 |
| General retail / ecommerce | 4–8× | 45–90 |
| Electronics | 5–8× | 45–75 |
| Manufacturing / parts | 3–6× | 60–120 |
| Furniture / jewelry / equipment | 2–4× | 90–180 |
Items that have not moved in 6–12 months drag the whole ratio down. Discount, bundle, or write them off — shelf space and cash beat wishful thinking.
Smaller, more frequent orders cut average inventory without hurting availability — especially for items with reliable suppliers.
Over-buying “just in case” is the most common turnover killer. A calculated reorder point buys exactly when needed — use our reorder point calculator.
The blended ratio hides problems: one dead SKU category can offset ten healthy ones. Per-item movement history shows exactly where cash is stuck.
This calculator gives you the period-level ratio. StockZip records every stock movement by barcode scan, so you can see what is actually moving — and what has been sitting for months — without a spreadsheet.
Straight answers about the formula, good ratios by industry, and how to improve yours.
Inventory turnover is the number of times a business sells and replaces its entire inventory in a period, usually a year. It is calculated as cost of goods sold divided by average inventory value. A turnover of 6 means you sold through your average stock level six times that year — roughly every 61 days.