INVENTORY / FREE OPERATOR TOOLS
Inventory Turnover Calculator
Use inventory valuations and COGS on the same cost basis.
Default numbers are an example, not industry data.
Formula
Average inventory = (beginning + ending inventory) ÷ 2. Turnover = COGS ÷ average inventory; days on hand = days in period ÷ turnover.
How it works
Inventory turnover measures how many times average stock is used during a period. Value beginning and ending inventory at cost on the same basis as COGS, and enter the actual number of days in that period. Do not compare retail-valued stock with purchase-cost COGS.
The average of two stock counts is a simple approximation; seasonal or uneven purchasing can make it unrepresentative. Days on hand is a historical estimate, not a stockout forecast. Review slow-moving items, delivery frequency and shortages together before changing order sizes.
Worked example
(4,000 + 6,000) ÷ 2 = 5,000 average inventory. 20,000 COGS gives 4.00 turns and 30 ÷ 4 = 7.50 days on hand.
Frequently asked questions
Should inventory be valued at selling price?
No. Use cost valuations consistent with COGS. Selling-price valuations would distort the turnover ratio.
Is higher turnover always better?
No. Less stock can reduce holding and spoilage, but insufficient stock can cause shortages. Consider lead times and service needs.
Why are days on hand blank when COGS is zero?
Zero COGS gives zero turnover; dividing period days by zero does not produce a finite days-on-hand figure.
Are my inputs saved or uploaded?
Calculations run in your browser. Inputs are not uploaded by the calculator. Sharing puts the inputs in a readable URL; anyone with that link can see them.