Inventory turnover calculator
Turnover is the speed of your money: COGS divided by average inventory. The days-of-inventory reading tells you how long a dollar sleeps on the shelf before coming home.
Healthy turnover is category-specific: grocery runs high teens, furniture low single digits. Track your own trend, not someone else's benchmark.
How often the shelf empties
Turnover is cost of goods sold divided by average inventory at cost. Sell $600,000 of goods while holding $100,000 on average and stock turns six times a year — roughly every two months.
Days of cover is the same fact read the other way: 365 ÷ 6 ≈ 61 days of stock on hand.
Higher is not automatically better
Rising turnover usually means capital working harder, but it can also mean you are running too lean and losing sales to stockouts nobody records. Falling turnover means cash tied up in goods that are not moving.
Turnover is most useful per category rather than for the whole business: a single average blends the line that sells weekly with the one that has not moved since 2023.
Frequently asked questions
Is higher always better?
Up to the stockout line. High turnover with empty shelves is lost sales wearing efficiency's clothes — pair this with low-stock visibility.
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