Inventory Turnover Ratio Calculator

Example scenario

Beginning inventory $120,000, ending $80,000, and COGS $600,000 over 365 days yields average inventory $100,000, turnover 6×, and DIO about 61 days.

Sample inputs

Beginning inventory ($): 120000
Ending inventory ($): 80000
Cost of goods sold ($): 600000
Period (days): 365

Sample results

Average inventory ($): See calculator result
Inventory turnover (×): See calculator result
Days inventory outstanding (DIO): See calculator result

Common mistakes

Misunderstanding: What is a good inventory turnover ratio — It depends on industry — grocery retailers often turn inventory 10–20× annually while heavy manufacturing may be 2–5×.
Misunderstanding: How does DIO relate to the cash conversion cycle — DIO is the inventory component of the cash conversion cycle.
Using default inputs without adjusting them to match your inventory turnover ratio calculator scenario.
Treating this estimate as a final number without checking accounting assumptions that apply to your situation.

Decision guide

Inventory turnover shows how many times inventory is sold and replaced during a period. Use the result as a planning checkpoint — not a substitute for professional advice where rules are complex.

Trust the projection more when

Enter beginning and ending inventory balances for the period
Enter cost of goods sold (COGS) for the same period
Set period length in days (365 for annual, 90 for a quarter)

Revisit inputs when

Review turnover ratio, days inventory outstanding (DIO), and assessment
Compare results to prior periods and industry benchmarks
Your jurisdiction, tax status, or contract terms differ from the example.

Inventory turnover shows how many times inventory is sold and replaced during a period. Controllers and operators use it with COGS and average inventory to spot slow-moving stock, stockout risk, and working capital tied up in goods.

How to use this calculator

Enter beginning and ending inventory balances for the period.
Enter cost of goods sold (COGS) for the same period.
Set period length in days (365 for annual, 90 for a quarter).
Review turnover ratio, days inventory outstanding (DIO), and assessment.
Compare results to prior periods and industry benchmarks.

Formula

Average inventory = (Beginning inventory + Ending inventory) ÷ 2. Inventory turnover = COGS ÷ Average inventory. Days inventory outstanding (DIO) = Period days ÷ Turnover. Inventory sold equals COGS for the period under the turnover formula.

Example

Beginning inventory $120,000, ending $80,000, and COGS $600,000 over 365 days yields average inventory $100,000, turnover 6×, and DIO about 61 days.

Frequently asked questions

What is a good inventory turnover ratio?

It depends on industry — grocery retailers often turn inventory 10–20× annually while heavy manufacturing may be 2–5×. Compare to peers and your own trend.

How does DIO relate to the cash conversion cycle?

DIO is the inventory component of the cash conversion cycle. Lower DIO generally frees cash but must be balanced against stockout risk.

Inventory Turnover Ratio Calculator