Inventory Turnover Calculator
Calculate inventory turnover ratio and days inventory outstanding to measure inventory management efficiency and optimize your supply chain performance.
Calculate Inventory Turnover
Financial Data
$
Total cost of goods sold during the period
$
(Beginning Inventory + Ending Inventory) ÷ 2
Time Period
Annual
12 months
Quarterly
3 months
Monthly
1 month
Industry Comparison
Select Industry for Benchmarking
Turnover Analysis
Inventory Turnover Ratio
5.0
times per year
Days Inventory Outstanding
73.0
days
Industry Average
8.5
times per year
Performance Status
Good
vs industry
Turnover Ratio Comparison
Low (0-4)
Average (4-8)
High (8+)
Calculation Details
Cost of Goods Sold (COGS)
$500,000
Average Inventory Value
$100,000
Calculation Period
Annual (365 days)
Turnover Formula
COGS ÷ Average Inventory
DIO Formula
365 ÷ Turnover Ratio
Industry Benchmark
Retail
Optimization Recommendations
- Your inventory turnover is healthy for your industry
- Consider implementing just-in-time inventory for further improvement
Understanding Inventory Turnover
Inventory turnover ratio measures how efficiently a company manages its inventory by comparing the cost of goods sold to average inventory value during a specific period.
Key Formulas
- Turnover Ratio = COGS ÷ Average Inventory
- Days Inventory Outstanding (DIO) = 365 ÷ Turnover Ratio
- Average Inventory = (Beginning + Ending Inventory) ÷ 2
- COGS = Beginning Inventory + Purchases - Ending Inventory
Industry Benchmarks
- Retail: 8-12 times per year
- Manufacturing: 4-6 times per year
- Automotive: 5-8 times per year
- Electronics: 6-10 times per year
- Pharmaceuticals: 2-4 times per year
Interpretation Guide
- High Turnover: Efficient inventory management, but risk of stockouts
- Low Turnover: Excess inventory, potential obsolescence
- Ideal Ratio: Varies by industry and business model
- Seasonal Factors: Consider business seasonality in analysis