ProCalc

Inventory turnover and days of inventory calculator

Inventory turnover says how many times average stock was sold during the year, measured at cost. Days of inventory turns that rate into the number of days the average stock would cover.

Use cost, for the same period as the stock figures.

Changes the symbol on the results. It does not convert the amounts.

Average inventory
$30,000.00
Inventory turnover
8 times
Days of inventory
45.63 days

Formula

Average inventory = (beginning inventory + ending inventory) / 2
Inventory turnover = cost of goods sold / average inventory
Days of inventory = 365 / inventory turnover

Days of inventory is the same as average inventory / cost of goods sold × 365. The page uses a 365-day year.

Worked example

Cost of goods sold is $240,000.00. Inventory starts at $40,000.00 and ends at $20,000.00, so the average is $30,000.00. Turnover is 240,000 / 30,000 = 8 times. Days of inventory are 365 / 8 = 45.63 days.

FAQ

How is average inventory calculated?

Average inventory = (beginning inventory + ending inventory) / 2. Use the same valuation, usually cost, for both stock figures and for cost of goods sold. Mixing retail prices into one figure and cost into another will not produce a usable turnover.

What is days of inventory?

Days of inventory = 365 / turnover. It is how many days of cost of goods the average stock represents. This page uses a 365-day year. A turnover of 8 is 365 / 8, or 45.63 days.

Is a higher turnover always better?

A higher turnover means stock is moving faster relative to the cost of goods sold. Very high turnover can also mean you are running so lean that you miss sales. Compare the number with your own past year, or with a similar product line, before you treat one result as a target.

What if I only know the ending balance?

The average of the beginning and the ending balance is the figure this calculator uses. An ending balance alone is a snapshot, not an average. If the year started at a very different level, using only the ending figure will skew the turnover. Enter the same number in both fields only when you truly mean that the stock did not change.

The result is a planning estimate from the numbers on this page. It is not an invoice, a tax filing, or a marketplace statement.