Inventory Turnover & Days Sales Calculator
Calculate inventory turnover ratio, days sales in inventory, and optimal stock levels
About this calculator
The Inventory Turnover & Days Sales Calculator helps businesses analyze their inventory efficiency by calculating key metrics like inventory turnover ratio and days sales in inventory. This tool enables companies to determine how quickly they sell through stock, identify optimal reorder points, and optimize cash flow. By understanding these metrics, businesses can reduce carrying costs, prevent stockouts, minimize waste from obsolete inventory, and make data-driven decisions about purchasing and storage strategies.
How to use
Enter your cost of goods sold (COGS) for a specific period and your average inventory value during that same timeframe. The calculator will automatically compute your inventory turnover ratio and days sales in inventory. Use these results to assess whether you're maintaining optimal stock levels and identify opportunities to improve inventory management efficiency.
Frequently asked questions
What is a good inventory turnover ratio?
A good ratio varies by industry, but generally 5-10 times per year is healthy. Higher ratios indicate efficient inventory management and strong sales performance.
How do I calculate average inventory?
Add your beginning inventory value and ending inventory value for the period, then divide by two to get the average inventory amount.
What does days sales in inventory tell me?
This metric shows how many days it takes to sell your entire inventory. Lower numbers indicate faster inventory movement and better cash flow.