Inventory Turnover Calculator (Turns and Days to Sell)
Divides the yearly cost of goods sold by the average inventory to show how many times stock turns over and how many days it takes to sell.
Recent
Formula
How the calculation works
The tool divides the yearly cost of goods sold by the average inventory value to get the turnover number.
That number tells you how many times the whole stock was sold and replaced during the year.
It then divides 365 days by the turnover to return the average number of days stock stays on the shelf.
Common mistakes
- Using the closing stock instead of the average, which hides stock that piled up during the busy season.
- Mixing the selling price into cost of goods, when turnover must use the cost value and not the retail value.
When to use it
- Check whether cash is sitting in slow-moving stock that takes months to turn into sales.
- Compare turnover before and after a buying change to see if stock is moving faster or getting stuck.
Worked example
A yearly cost of goods of 1200000 taka and an average inventory of 200000 give a turnover of 6 times, so stock takes about 60.8 days to sell.
Common questions
Is a higher inventory turnover always better?
Usually yes, but too high a turnover can mean you are understocked and losing sales when a popular item runs out.
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