Inventory Turnover Analysis Calculator
Calculate inventory turnover ratio, days sales in inventory, and inventory performance metrics
About this calculator
The Inventory Turnover Analysis Calculator helps businesses evaluate how efficiently they manage their inventory by calculating key performance metrics. It computes the inventory turnover ratio, which shows how many times inventory is sold and replaced over a period, and days sales in inventory, indicating how long it takes to sell current stock. These metrics are essential for optimizing cash flow, reducing carrying costs, and identifying potential overstocking or understocking issues that can impact profitability and operational efficiency.
How to use
Enter your cost of goods sold (COGS) for the period and average inventory value. The calculator will automatically compute your inventory turnover ratio by dividing COGS by average inventory. It will also calculate days sales in inventory by dividing 365 by the turnover ratio, showing how many days it takes to sell your current inventory on average.
Frequently asked questions
What is a good inventory turnover ratio?
A good ratio varies by industry, but generally 5-10 is healthy. Higher ratios indicate efficient inventory management, while lower ratios may suggest overstocking or slow-moving products.
How do I calculate average inventory?
Add your beginning inventory value and ending inventory value for the period, then divide by two. Use the same time period as your COGS data.
What does days sales in inventory tell me?
It shows how many days it takes to sell your current inventory. Lower numbers indicate faster inventory movement and better cash flow management.