- Fill in Cost of Goods Sold (COGS), and Average Inventory. Each control is labeled; you do not need to paste a JSON blob.
- Click "Run" to run the tool in your browser.
- Read the result below the form and copy it if you need it in another app.
Inventory Turnover Calculator
The Inventory Turnover Calculator determines how many times a company sells and replace...
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How to Use This Tool
Learn More About Inventory Turnover Calculator
Inventory Turnover Formula
The inventory turnover ratio is calculated using the following formula:
Inventory Turnover = Cost of Goods Sold / Average Inventory
Where:
- Cost of Goods Sold (COGS) = Direct costs of producing goods or services
- Average Inventory = (Beginning Inventory + Ending Inventory) / 2
Interpreting Inventory Turnover
A higher inventory turnover ratio indicates that a company is efficiently managing its inventory and selling its products quickly. A low ratio may indicate that a company has excess inventory or slow-moving products.
Factors Affecting Inventory Turnover
Factors that can affect a company's inventory turnover ratio include changes in sales, inventory levels, and supply chain management practices.
About
The Inventory Turnover Calculator determines how many times a company sells and replaces its inventory over a specific period. This ratio indicates how efficiently a company is managing its inventory.
Examples
Valid COGS and average inventory
Input
Input
{
"COGS": 600000,
"Average Inventory": 200000
}Output
3.0000
Valid: small numbers
Input
Input
{
"COGS": 10000,
"Average Inventory": 5000
}Output
2.0000
Use Cases
- Assessing a company's efficiency in managing its inventory
- Comparing a company's inventory turnover to industry averages
- Identifying trends in a company's inventory management over time
- Evaluating the effectiveness of inventory control strategies