Inventory Turnover Calculator
Calculate inventory turnover ratio and days in inventory from COGS and inventory levels.
By Konstantin Iakovlev · Updated April 2026 · Source: SBA — Business Guide
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 Ratio | 7.14 |
| Days in Inventory | 51.1 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
How fast stock moves off your shelves and gets replaced says a great deal about how well a business runs. Inventory turnover captures that pace, and in the supply-conscious 2026 economy it carries extra weight, flagging both the stockouts and the overstocking that quietly erode profit. Read alongside cash flow, the metric helps sharpen purchasing decisions in a market that rewards resilience.
The ratio itself comes from dividing Cost of Goods Sold (COGS) by Average Inventory. Take that result, divide 365 by it, and you have Days in Inventory, the average number of days a unit waits before it sells. Together the two figures show how many times stock cycles through over a period and how long it tends to sit.
Accuracy hinges on matching the time periods you use for COGS and Average Inventory; mismatched windows skew the outcome. Substituting sales revenue for COGS is the error that trips people up most, since it inflates turnover and overstates efficiency. Benchmarks also swing hard by sector: in 2026 a grocery store might chase a turnover near 50 while a luxury car dealership is content with 5.
Example: 2026 Retailer Inventory Analysis
- 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 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 The retailer's Inventory Turnover Ratio for Q1 2026 is 5.0, and their Days in Inventory is 73 days.
- 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?
How do I calculate inventory turnover?
How can I improve inventory turnover?
You might also need
Self-Employment Tax Calculator 2026 — SE Tax & Quarterly Payments
Calculate SE tax, quarterly estimated payments, and total tax burden for freelancers and 1099 contractors. Free, instant results based on 2026 IRS rates.
LLC vs S-Corp Tax Comparison Calculator
Compare tax liability as an LLC vs S-Corp. See how much you can save on self-employment tax with an S-Corp election.
W-2 vs 1099 Comparison Calculator
Compare take-home pay as a W-2 employee vs 1099 contractor. Find the equivalent 1099 rate to match your W-2 salary.