Inventory Turnover Ratio Calculator

Calculate how efficiently your inventory is managed

Inventory Turnover Formula

Inventory Turnover Ratio = Cost of Goods Sold / Average Inventory

This fundamental formula helps businesses understand how efficiently they're managing inventory.

Why Inventory Turnover Matters for SEO:

"Inventory Turnover Formula" is a highly searched term because:

  • Business owners want to understand their inventory efficiency
  • Financial analysts compare companies within industries
  • Inventory management directly impacts cash flow and profitability
  • Investors use this metric to assess operational efficiency

Key Insights:

High Turnover

Indicates strong sales or ineffective buying (stockouts possible)

Low Turnover

Suggests weak sales or excess inventory (holding costs increase)

How Our Inventory Turnover Calculator Works

Enter Cost of Goods Sold

Input your total cost of goods sold (COGS) for the period. This represents the direct costs of producing goods sold by your company.

Provide Average Inventory

Enter your average inventory value for the same period. This is typically calculated as (Beginning Inventory + Ending Inventory) / 2.

Get Detailed Analysis

Receive your inventory turnover ratio and days in inventory metrics, along with interpretation to help you optimize stock levels.