Enter your cost of goods sold, beginning inventory, and ending inventory to calculate inventory turnover ratio, days to sell inventory, and compare with industry benchmarks.
Inventory Turnover Calculator
Calculate your inventory turnover ratio, days to sell, and compare with industry benchmarks.
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FAQ
What is inventory turnover ratio?
Inventory turnover ratio measures how many times a company sells and replaces its inventory over a period. It is calculated as COGS divided by average inventory. A higher ratio indicates faster-selling inventory and generally more efficient operations.
How do you calculate days to sell inventory?
Days to sell inventory (also called Days Sales of Inventory or DSI) equals 365 divided by the inventory turnover ratio. For example, if your turnover ratio is 6, your DSI is about 61 days, meaning on average it takes 61 days to sell through your inventory.
What is a good inventory turnover ratio?
A "good" ratio varies by industry. Grocery stores may have 12-20x turnover, while furniture stores may have 4-6x. Generally, higher is better as it means less capital tied up in inventory, but too high can indicate frequent stockouts.
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