What is a good turnover ratio?

Grocery and fresh food often exceed 15×, general retail sits near 4–8×, and heavy equipment or jewellery may be 1–3×. Compare within your own sector.

Should I use COGS or revenue?

Use cost of goods sold. Inventory is carried at cost, so using revenue inflates the ratio by your margin.

How do I improve turnover?

Order smaller quantities more often, discount dead stock, tighten forecasting, and drop SKUs that consistently sit.

Does this work for a service business?

Only if you hold physical parts or materials. Pure service businesses have no meaningful inventory turnover.

Inventory Turnover Calculator

Measure how fast stock converts into sales.

Inventory turnover tells you how many times you sell and replace your entire stock during a period. It is calculated from the cost of goods sold and the average inventory value held over that period, and it converts directly into days sales of inventory — the average number of days a product sits on the shelf before it is sold.

For retailers, wholesalers, restaurants, and e-commerce sellers, this ratio is a cash flow measure as much as an operations one. Stock sitting in a warehouse is money that cannot be spent on rent or payroll, and slow-moving inventory quietly becomes obsolete, damaged, or discounted.

A high turnover suggests efficient purchasing and healthy demand, though pushed too far it causes stockouts and lost sales. A low turnover points to over-ordering, weak demand, or pricing problems. Enter your figures below to see your ratio, your days of inventory, and the implied revenue tied up in stock.

Your numbers

Cost of goods sold (period)

Beginning inventory value

Ending inventory value

Days in period

Inventory turnover

6.00×

🇺🇸 US · USD

Average inventory: $80,000.00
Days sales of inventory: 61 days
Cost of goods sold: $480,000.00
Average daily COGS: $1,315.07

Estimates only. Results from this calculator are for general informational purposes and are not tax, legal, accounting or financial advice. Rates change and individual circumstances vary — confirm figures with the CRA, the IRS, your state or provincial authority, or a licensed professional before acting on them.

How it's calculated

Average inventory = (Beginning inventory + Ending inventory) ÷ 2
Inventory turnover = Cost of goods sold ÷ Average inventory
Days sales of inventory = Days in period ÷ Inventory turnover

Understand the numbers

Inventory turnover: what a good number actually looks like

Frequently asked questions

What is a good turnover ratio?: Grocery and fresh food often exceed 15×, general retail sits near 4–8×, and heavy equipment or jewellery may be 1–3×. Compare within your own sector.
Should I use COGS or revenue?: Use cost of goods sold. Inventory is carried at cost, so using revenue inflates the ratio by your margin.
How do I improve turnover?: Order smaller quantities more often, discount dead stock, tighten forecasting, and drop SKUs that consistently sit.
Does this work for a service business?: Only if you hold physical parts or materials. Pure service businesses have no meaningful inventory turnover.

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