Inventory Turnover Calculator
How many times a year stock sells through and gets replaced — and how many days, on average, it sits on the shelf before that happens.
Inventory turnover calculator
How many times per year stock sells through and gets replaced, plus the average number of days inventory sits before selling.
Educational illustration only. A high turnover generally means efficient stock management; a low or falling turnover can indicate overstocking or slowing sales — context matters more than the raw number.
The formula
Inventory Turnover = Cost of Goods Sold ÷ Average Inventory, where Average Inventory = (Opening + Closing) ÷ 2. Days Inventory Outstanding (DIO) = 365 ÷ Turnover — the same figure expressed as a number of days instead of a number of times per year.
Reading the number
A high turnover generally means efficient stock management and less capital tied up sitting on shelves. A low or falling turnover can indicate overstocking or slowing sales — but what counts as “high” varies enormously by industry (a grocery business turns inventory far faster than a heavy-machinery manufacturer), so the number is most useful compared against the same business’s own trend over time, not an arbitrary external benchmark.
Build the full inventory analysis in Excel
This turnover formula is one piece of a complete inventory workflow — stock movement, cost valuation and reorder flagging — taught in Advanced Excel for Finance & Business.