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Inventory Turnover Calculator

Divide cost of goods sold by average inventory to see how many times stock is sold and replaced.

About Inventory Turnover Calculator

The ratio divides one figure by the other and is read against a conventional benchmark of 6. Both the ratio and its percentage form are shown, because different audiences expect different presentations of the same number. A turnover ratio compresses two absolute figures into one comparable number, which is what makes it usable across companies and periods of different size.

Formula

Inventory Turnover

Inventory Turnover = Cost of goods sold ÷ Average inventory held

Cost of goods sold
Numerator of the ratio
Average inventory held
Denominator of the ratio

Worked example

With the default values below, Inventory Turnover Calculator returns Inventory Turnover of 6.000. Change any input above and every figure here is recalculated in your browser.

Inputs used

Cost of goods soldminimum 0
900,000
Average inventory heldminimum 0
150,000

Results

Inventory Turnover
6.000
Expressed as a Percentage
600.00%
Surplus Over the Benchmark
0.000
Inverse Ratio
0.167
Interpretation
Adequate — at or above the benchmark of 6

Step by step

  1. 1Values used
  2. 2Inventory Turnover
  3. 3Inventory Turnover= 6.000
  4. 4Expressed as a Percentage= 600.00
  5. 5Surplus Over the Benchmark= 0.000
  6. 6Inverse Ratio= 0.167
  7. 7Interpretation= Adequate — at or above the benchmark of 6

Assumptions and limits

  • The result is derived only from the 2 inputs listed above. Anything not among them is not part of the calculation.
  • In particular, this calculator does not take inflation, tax or compounding frequency into account.
  • Figures are rounded for display to 3 decimal places, so totals built from several rounded parts can differ slightly from the unrounded arithmetic.
  • This is an estimate for general information and not professional financial, tax or legal advice. See the full disclaimer for the limits that apply to this kind of calculator.

How these calculators are built and tested is described on the Methodology page. If a figure looks wrong, please report it.

Frequently Asked Questions

How is Inventory Turnover calculated?

Inventory Turnover = Cost of goods sold ÷ Average inventory held The ratio divides one figure by the other and is read against a conventional benchmark of 6. Both the ratio and its percentage form are shown, because different audiences expect different presentations of the same number.

Why does Inventory Turnover matter?

A turnover ratio compresses two absolute figures into one comparable number, which is what makes it usable across companies and periods of different size.

What values do I need to enter?

This calculator takes 2 inputs: Cost of goods sold, Average inventory held. The pre-filled defaults are a realistic starting point — replace them with figures from your own environment for a result you can act on.

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