Inventory Turnover Calculator
The Inventory Turnover Calculator measures how efficiently your business manages inventory. A higher turnover ratio indicates faster-moving inventory and better cash flow management. This calculator also computes Days Inventory Outstanding (DIO), showing how many days it takes to sell through your average inventory.
Inventory Turnover Calculator
Measure inventory efficiency and days outstanding
Examples
Retail Store Example
Annual COGS of $2M with average inventory of $500K. Turnover = 4×. DIO = 91.25 days.
Frequently Asked Questions
What is a good inventory turnover ratio?
A good inventory turnover ratio varies by industry. Retail grocery typically sees 15–25× annually. General retail averages 4–6×. Manufacturing might see 4–10×. Higher is generally better, but too high can indicate stockouts.
How do you calculate inventory turnover?
Inventory Turnover = Cost of Goods Sold (COGS) ÷ Average Inventory Value. Average inventory = (Beginning Inventory + Ending Inventory) ÷ 2.
What is Days Inventory Outstanding (DIO)?
DIO = 365 ÷ Inventory Turnover Ratio. It represents the average number of days it takes to sell through your inventory. Lower DIO means faster inventory movement.