Inventory Turnover Calculator

Inventory turnover is a way to measure how effectively funds invested in inventory are being converted into sales revenue.

Definitions	Inventory turnover per year equals cost of goods sold divided by average inventory.
	Inventory turnover in days equals 365 days divided by inventory turnover.
Cost of goods sold is the total cost of products sold during a year.
Average inventory is the sum of beginning and ending inventories divided by two.

Inventory Turnover Calculator
Cost of Goods Sold	$
Beginning Inventory	$
Ending Inventory	$
Inventory Turnover per year
Inventory Turnover in days

Working with your inventory turnover

Other than pure service business, almost all businesses need inventory. To effectively use your working capital, the key is to have the least inventory needed to meet the delivery expectations of your customers. Capital intensive businesses will usually have lower inventory turnover rates than other businesses. You may want to compare your rates with competitors or other companies in similar lines of business.

By monitoring changes in your inventory turnover over time, you can better understand the financial dynamics of your business and run it more effectively. Here is a worksheet you can use to track changes in this and other important measures.