Inventory Turnover Ratio Calculator
Enter your cost of goods sold for the last 12 months and your average inventory value at cost. You get your inventory turnover, the days it takes to sell your stock, and a benchmark to compare against.
Results
- Inventory turnover per year
- 4.00×
- Days inventory outstanding
- 91.3 days
Shopify cites a retail benchmark of 10.86 turns a year. You turn your stock 4 times a year, below that benchmark. Healthy turnover varies a lot by product type.
Frequently asked questions
How do you calculate inventory turnover?
Divide cost of goods sold for a year by your average inventory value. The result is how many times you sold through your stock.
What is days inventory outstanding?
Days inventory outstanding is 365 divided by inventory turnover. It is the average number of days a unit sits in stock before it sells.
What is a good inventory turnover ratio for retail?
Shopify cites a retail benchmark of 10.86 turns a year, but a good ratio depends on what you sell. Perishable goods turn faster than furniture or luxury items, so compare against stores like yours.
Is a high inventory turnover always better?
A higher ratio usually means efficient stock, but a very high ratio can mean you run out of stock and lose sales. Compare it with your stockout rate.
Related tools
Sources and assumptions
Use cost of goods sold, not revenue, and inventory valued at cost.
Estimates for planning, not financial advice. Check current rates with your provider.