Inventory Turnover Calculator

What this calculator does

This tool calculates your inventory turnover rate — how many times per year your business sells and replaces its stock — and your Days Inventory Outstanding (DIO), which tells you how many days it takes on average to sell your inventory. Both metrics are calculated month by month based on COGS and average inventory values you enter, with optional growth rates.

Who it's for: Retail and wholesale business owners assessing stock efficiency, operations managers identifying slow-moving categories, accountants benchmarking a client's inventory management, and finance teams analysing working capital cycles.

When to use it: When reviewing your purchasing strategy, preparing for a bank review, identifying dead stock, or assessing the working capital cost of your current inventory levels.

When not to use it: Turnover is a blended average across all stock. A single turnover figure can mask major variance across product lines — a fast-moving line might offset significant dead stock elsewhere. For operational decisions, analyse turnover by SKU or category in your ERP or stock management system.

How the calculation works

Inventory turnover and DIO are calculated from COGS and average inventory value.

Why COGS, not revenue? COGS represents the cost of goods actually sold — it is measured on the same cost basis as inventory on the balance sheet. Using revenue would inflate turnover because revenue includes profit margin. COGS-based turnover is the industry standard.

Average inventory is ideally the mean of opening and closing inventory for the period. If you only have one balance sheet snapshot, enter that figure. Over a 12-month projection, the calculator applies your specified growth rate to this starting figure and computes turnover for each month.

Worked examples