Measure how fast inventory sells through in a year.
Inventory turnover compares what a business sells at cost to the stock it averages, and the complement gives how many days goods sit before selling. Cash locked in shelves earns nothing, so healthy turnover separates retailers whose money cycles from those whose stock gathers dust.
Inventory Turnover
Turnover = cost of goods sold / average inventory
Turnover = cost of goods sold / average inventory Inventory turnover compares what a business sells at cost to the stock it averages, and the complement gives how many days goods sit before selling.
Cash locked in shelves earns nothing, so healthy turnover separates retailers whose money cycles from those whose stock gathers dust.
This calculator takes 2 inputs: Annual cost of goods sold, Average inventory value. The pre-filled defaults are a realistic starting point — replace them with figures from your own environment for a result you can act on.