Ecommerce & profit
Inventory Turnover Calculator
Compare cost of goods sold with average inventory at cost to measure stock turnover during a defined period.
Use this to assess how frequently stock is sold and replaced. Use AOV or product profit for sales-basket and profitability questions.
What the result means
The ratio describes how many times the average inventory value flowed through COGS in the period. A high result can reflect efficient stock use or insufficient safety stock; context determines which.
The formula
Period cost of goods sold / average inventory at cost
Results are displayed to at most two decimal places. Calculations use the unrounded inputs.
A worked example
Put the formula to work
- Period cost of goods sold (currency)
- 240,000
- Average inventory at cost (currency)
- 60,000
Inventory turns during the selected period: 4x
Annual COGS of 240,000 divided by average inventory of 60,000 gives four inventory turns for that year.
How to use this calculator
- Select a period and obtain its accounting cost of goods sold.
- Average inventory values measured at the same cost basis.
- Divide COGS by average inventory.
- Compare only matching period lengths and inspect stockouts alongside the ratio.
Why this number matters
Turnover connects the inventory investment to the flow of goods sold, supporting working-capital and replenishment decisions.
Input definitions
- Period cost of goods sold (currency)
- Accounting COGS for the chosen period, not revenue or total inventory purchases.
- Average inventory at cost (currency)
- Average inventory book value over the same period; use frequent snapshots for seasonal businesses. Must be greater than zero.
Assumptions and limitations
- Beginning-and-ending averages can misrepresent seasonal stock peaks.
- Valuation methods and write-downs affect comparisons.
- The ratio is not annualized automatically and does not directly measure days in stock.
Methodology
The default result and worked example use the same calculation functions as the interactive tool. The formula cannot verify the quality or scope of your source data.
Read our calculation methodology
Last updated .