Inventory Turnover Calculator
Measure inventory turns, days on hand, sales-to-inventory and GMROI from beginning and ending inventory.
What Is the Inventory Turnover Calculator?
The Inventory Turnover Calculator measures how efficiently inventory supports sales and gross profit. It averages beginning and ending inventory, divides COGS by that balance for turnover, converts turns into days on hand and also reports sales-to-inventory and gross-margin return on inventory investment.
How It Works
Enter values from the same reporting period and accounting basis. Use cost-basis inventory with COGS, select the actual number of days in the period and add net sales and gross profit for the supporting ratios.
When to Use It
Use it for retail, wholesale, manufacturing and ecommerce trend reviews. Compare against the same business over time or a genuinely comparable category; high turnover is not automatically healthy when stockouts or lost sales are present.
Frequently Asked Questions
- Why Use Average Inventory?
- A beginning-and-ending average better represents capital held during the period than either endpoint alone, though monthly averages are stronger for seasonal businesses.
- What Does GMROI Measure?
- GMROI divides gross profit by average inventory at cost, showing how much gross margin the period generated per currency unit invested in inventory.
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