Inventory Turnover Calculator
Calculate inventory turnover and inventory days from COGS and average inventory.
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The inventory turnover calculator helps you quickly check how often your inventory turns and how many days goods sit in stock on average. Enter two values: annual cost of goods sold (COGS) and average inventory. The defaults are $120,000 for COGS and $24,000 for average inventory, and the default currency is US dollars ($).
- Annual cost of goods sold (COGS) – the total cost of goods you sold during the year.
- Average inventory – the average value of goods held in inventory during the same period.
The tool runs in your browser and calculates locally; it does not send data. After you enter values, you get inventory turnover and inventory days. For the default values, the result is Inventory turnover 5× and Inventory days (365 ÷ turnover) 73 days. You can change the numbers and test your own scenario right away.
How to Calculate COGS and Average Inventory
COGS is the annual cost of goods sold. In the simplest terms, it includes the cost to purchase or produce products that were sold. Do not confuse it with revenue or profit margin – it is a cost, not sales value.
Average inventory is the average value of inventory over the period. It is often calculated as: average inventory = (beginning inventory + ending inventory) ÷ 2. If you want a more accurate picture, you can average the balances from several months.
The turnover formula is simple: inventory turnover = annual COGS ÷ average inventory. Inventory days = 365 ÷ turnover. For the default values: $120,000 ÷ $24,000 = 5×, and 365 ÷ 5 = 73 days.
Keep the period consistent. If COGS is for a year, average inventory should also cover the year. Otherwise, the result will be hard to compare with reality.
Interpreting Inventory Turnover and Inventory Days
Inventory turnover tells you how many times per year your inventory was sold and replenished. A result of 5× means that, on average, you turn over your entire inventory five times per year. Inventory days show the same thing from another angle: 73 days is the average time goods remain in inventory.
High turnover usually means capital is not tied up in inventory for long. It can be a good signal, but it can sometimes mean stockouts and lost sales. Low turnover may indicate excess inventory, slow-selling products, or overordering.
Do not judge the result in isolation. The same turnover can be excellent in one industry and weak in another. What matters is comparison with your history, seasonality, margin, and lead times. Inventory days help you connect the result to day-to-day purchasing decisions.
Typical E-commerce Inventory Turnover Benchmarks
There is no single universal benchmark for inventory turnover. In e-commerce, the result depends on category, price, seasonality, lead time, and business model. Treat the ranges below as rough reference points, not strict rules.
| Situation | Approximate turnover | Approximate inventory days |
|---|---|---|
| Very fast turnover | Above 8× | Below about 46 days |
| Good turnover | 5-8× | About 46-73 days |
| Moderate turnover | 3-5× | About 73-122 days |
| Slow turnover | Below 3× | Above about 122 days |
In practice, many stores look for a balance between product availability and the cost of tied-up capital. Seasonal products may have different turnover during peak and off-peak periods. Always compare the result with your own goals and current platform pricing if you sell on Amazon, Etsy, eBay, Shopify, Vinted, or TikTok.
Limitations: What the Tool Does Not Calculate
The inventory turnover calculator relies only on two inputs: annual COGS and average inventory. It does not include taxes, storage costs, shipping, packing, returns, platform fees, or commissions.
- It does not add taxes or duties.
- It does not know storage, shipping, return handling, or packing costs.
- It does not include current exchange rates, platform pricing, or individual agreement terms.
- It does not analyze seasonality, lead times, safety stock, or individual products.
- It does not import or export files. It has no platform rates, commissions, or sales limits.
The result is therefore a starting point for decisions, not a full accounting of your business. If you want to assess profitability, combine turnover with costs, margin, and current platform pricing. The tool does not replace accounting analysis or individual commercial terms.
Frequently Asked Questions
How do I calculate inventory turnover?
Divide annual COGS by average inventory. For example, $120,000 ÷ $24,000 = 5×, meaning inventory turns over five times per year.
What do inventory days mean?
They are the average number of days goods remain in inventory. Calculate them as 365 ÷ turnover; at 5× turnover, you get 73 days.
What is a good inventory turnover in e-commerce?
There is no single good value. Much depends on industry, margin, seasonality, and lead time, so use the approximate ranges as a starting point for your own comparisons.
How do I determine average inventory?
The simplest way is to add beginning and ending inventory and divide by two. For a more accurate picture, average the balances from several months.
Does the inventory turnover calculator send my data?
No. The tool runs in your browser and calculates locally, so it does not send data.
Does the calculator include taxes and storage costs?
No. It uses annual COGS and average inventory, so taxes, storage costs, shipping, returns, and platform fees must be assessed separately.
See also — related tools
Calculations run locally in your browser; the result is for guidance only and depends on the accuracy of your COGS and average inventory.