Small-business finance
Inventory turnover and days in inventory
Measure cost-based inventory turnover and holding days over your selected accounting period.
Your inputs
Complete the fields for your selected method. Zero means intentionally zero, not unknown. Currency selection labels amounts; it does not convert exchange rates.
How this calculation works
average inventory = supplied average or (opening + closing)/2; turnover = cost of goods sold / average inventory; days in inventory = period days / turnover
Use cost of goods sold, not sales revenue, and inventory valued on the same accounting basis. Opening/closing average is a simple approximation; supply a more representative average for seasonal or volatile stock. Turnover describes the entered period, not automatically a year. Zero denominators are reported as undefined. No industry target, valuation method, tax treatment or stockout risk is prescribed.
What information do I need?
Use records for the same job, equipment or accounting period. Only the fields for your selected entry method are required. An unknown amount is not zero.
Input definitions and where to find them
- Cost of goods sold during period (selected currency): Use the same item, accounting period and unit basis for matching records. Use cost of goods sold from accounting records, not sales revenue.
- Days in the same accounting period (days): Use the same item, accounting period and unit basis for matching records. Use the actual length of the accounting period.
- Average inventory entry: Use the same item, accounting period and unit basis for matching records. Use your own records or a stated estimate; example figures are not benchmarks.
- Opening inventory at cost (selected currency): Use the same item, accounting period and unit basis for matching records. Use your own records or a stated estimate; example figures are not benchmarks. Used with: Opening and closing inventory at cost.
- Closing inventory at cost (selected currency): Use the same item, accounting period and unit basis for matching records. Use your own records or a stated estimate; example figures are not benchmarks. Used with: Opening and closing inventory at cost.
- Average inventory at cost for the period (selected currency): Use the same item, accounting period and unit basis for matching records. Use your own records or a stated estimate; example figures are not benchmarks. Used with: I have a more representative average inventory.
Use the Where to find this value controls beside the inputs for available work-it-out helpers. Estimates remain your assumptions; a helper does not verify the source figures.
Worked example
Example amounts use US dollars (USD).
Example answer: Inventory turnover in entered period is 5.0000 turns for the illustrative inputs below.
Example inputs
- Cost of goods sold during period: $120,000.00
- Days in the same accounting period: 365.00 days
- Average inventory entry: Opening and closing inventory at cost
- Opening inventory at cost: $20,000.00
- Closing inventory at cost: $28,000.00
- Inventory turnover in entered period
- 5.0000 turns
- Days in inventory on entered period basis
- 73.000 days
- Average inventory at cost
- $24,000.00
- Average daily cost of goods sold
- $328.77
These illustrative values are not recommended rates or industry averages. Replace every example input with your own figures.
Use the result well
Measure cost-based inventory turnover and holding days over your selected accounting period.
Keep inputs on the same scope and time basis. Calculations retain precision internally; displayed values generally round to two decimal places, with extra precision for very small values and whole-unit rounding where required. Economic comparisons describe your supplied assumptions and do not guarantee future results.
This tool provides business arithmetic. It does not approve engineering designs, establish legal or tax treatment, select equipment or certify safe operating conditions.