Inventory Turnover Calculator

Calculate inventory turnover ratio and days in inventory from COGS and inventory levels.
Period
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$
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Inventory Turnover

7.14

Days in Inventory

51.1 days

Rating

Good

Inventory Analysis

Cost of Goods Sold$500,000.00
Average Inventory$70,000.00
Turnover Ratio7.14
Days in Inventory51.1 days

Industry Benchmarks

Grocery/perishables: 14-20x | Retail: 8-12x | Manufacturing: 4-8x | Luxury goods: 2-4x

Use the Inventory Turnover Calculator above to calculate your results. Enter your values and see instant results — all calculations run in your browser.

Disclaimer: This calculator is for informational purposes only and does not constitute tax, financial, or legal advice. Results are estimates based on the information you provide and current rates. Always consult a qualified tax professional or financial advisor for advice specific to your situation.

How It Works

Our Inventory Turnover Calculator helps you efficiently assess how quickly your business sells and replaces its inventory. This crucial financial metric, especially relevant in the dynamic 2026 economic landscape, indicates your operational efficiency and helps prevent stockouts or overstocking, which can significantly impact profitability. Understanding your inventory turnover is vital for optimizing cash flow and making informed purchasing decisions in a market where supply chain resilience is paramount.

The Inventory Turnover Ratio is calculated by dividing the Cost of Goods Sold (COGS) by the Average Inventory. To determine the Days in Inventory, you then divide 365 by the Inventory Turnover Ratio. This methodology provides a clear picture of how many times your inventory is sold and replenished within a given period, and how many days, on average, inventory sits before being sold.

When using this calculator, ensure you are using consistent time periods for both COGS and Average Inventory to avoid skewed results. A common mistake is using sales revenue instead of COGS, which inflates the turnover and misrepresents efficiency. Also, be aware that industry benchmarks vary significantly; for instance, a grocery store in 2026 might aim for a turnover of 50, while a luxury car dealership might target 5.

Example: 2026 Retailer Inventory Analysis

  1. 1 A small online retailer in Q1 2026 reported a Cost of Goods Sold (COGS) of $150,000. Their beginning inventory for the quarter was $28,000 and their ending inventory was $32,000.
  2. 2 First, calculate the Average Inventory: ($28,000 + $32,000) / 2 = $30,000. Next, calculate the Inventory Turnover Ratio: $150,000 (COGS) / $30,000 (Average Inventory) = 5.0. Finally, calculate Days in Inventory: 365 / 5.0 = 73 days.
  3. 3 The retailer's Inventory Turnover Ratio for Q1 2026 is 5.0, and their Days in Inventory is 73 days.
  4. 4 This means the retailer sold and replenished their entire inventory 5 times during Q1 2026, with inventory sitting for an average of 73 days before being sold. Compared to an industry average of 6.0 for similar online retailers in 2026, this suggests there might be opportunities to optimize inventory management and reduce holding costs.

Source: SBA — Business Guide · Last updated: April 2026

Frequently Asked Questions

What is a good inventory turnover ratio?
A good ratio varies by industry. Grocery stores average 14-20 turns per year, retail apparel 4-6, and electronics 8-12. Generally, higher turnover means better efficiency, but too high can mean stockouts and lost sales.
How do I calculate inventory turnover?
Inventory turnover equals Cost of Goods Sold (COGS) divided by average inventory. If COGS is $500,000 and average inventory is $100,000, turnover is 5. Days in inventory is 365 divided by turnover, which is 73 days in this example.
How can I improve inventory turnover?
Improve demand forecasting, reduce lead times, eliminate slow-moving or obsolete stock, implement just-in-time ordering, run promotions on stale inventory, and use ABC analysis to focus on high-value items.

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