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Inventory turnover and inventory days

Enter matched-period cost of goods sold and opening and closing inventory at cost to estimate inventory turns and average inventory days.

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Editable example

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Choose one period. Enter the cost of goods sold, opening and closing inventory at cost, and actual days. Use the same currency and units, not sales revenue or item counts.

Cost of goods sold in this period (currency units, not sales)For example 600000. Use the cost of goods actually sold in this period, not sales revenue, total purchases, rent or wages.

Opening inventory at cost (currency units)Inventory book cost at the start of this period, for example 100000. Do not enter a count of items.

Closing inventory at cost (currency units)Inventory book cost at the end of the same period, for example 200000. Use the same currency and units as the opening value.

Number of days in this periodFor example 90 or 365. Match the period used for cost of goods sold; a full year is not required.

Results update when inputs are complete. A plan is kept only when you save it. Inputs and results are not uploaded.

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Example result

Inventory turns in this period

4turns (this period)

The main answer is turns in this period. Days describe an average pace, not a deadline for selling a batch. With zero cost of goods sold, days cannot be estimated.

Average inventory cost150,000 currency units

Days in the period365 days

Estimated inventory days91.25 days

Worked steps

(100000 + 200000) ÷ 2 = 150000
600000 ÷ 150000 = 4
365 ÷ 4 = 91.25

Average inventory = (opening inventory cost + closing inventory cost) / 2. Inventory turns = matched-period cost of goods sold / average inventory. Inventory days = days in this period / inventory turns. Use the same currency, amount units, cost basis and reporting period. Cost of goods sold is the cost of items sold, not sales revenue, all purchases or all operating expenses. Average inventory must be positive. Zero cost of goods sold means zero turns; inventory days cannot be estimated. The endpoint average ignores changes during the period. Results describe an average pace, not a promise to sell a particular batch or collect cash, and do not assign a universal good-or-bad threshold.

Method and scope

Use the same currency, amount units, cost basis and reporting period. Cost of goods sold is the cost of items sold, not sales revenue, all purchases or all operating expenses.

Average inventory must be positive. Zero cost of goods sold means zero turns; inventory days cannot be estimated. The endpoint average ignores changes during the period. Results describe an average pace, not a promise to sell a particular batch or collect cash, and do not assign a universal good-or-bad threshold.

References:SEC: financial statements and inventory turnover formula、OpenStax: inventory turnover and days in inventory

What this helps you do

Calculate how many times inventory turns over during a reporting period, using the cost of sold goods and inventory held at cost. This differs from a reorder point, which estimates when to order more stock.

What to enter

Use cost of goods sold, not sales revenue, total purchases, rent or wages. Opening and closing values are inventory book costs at the two ends of the same period, not item counts. Use one currency and amount unit throughout, plus the actual number of days in that period.

How it is calculated

Average inventory = (opening + closing) / 2. Turns = cost of goods sold / average inventory. Days = period days / turns. The main result applies to the period you entered and is not automatically annualized.

Worked example

Synthetic example: cost of goods sold 600000, opening inventory 100000, closing inventory 200000 and 365 days give average inventory 150000, 4 turns and 91.25 inventory days. A 90-day period with 480000 cost and 80000 / 160000 inventory gives 4 turns and 22.5 days.

Understanding the answer

Inventory days express an average pace under your inputs. They do not promise when any particular batch will sell or when customers will pay. Compare like periods, industries and accounting cost bases rather than applying one universal threshold.

Scope and limitations

The simple endpoint average may not represent seasonal or mid-period changes. Average inventory must exceed zero. If cost of goods sold is zero, turns are zero and days are unavailable. Amounts are limited to 0–1 trillion; periods to 1–3660 whole days. Extreme amount ratios are rejected. No stock recommendations, live accounts or cash collection forecasts are provided. Inputs and saved plans remain in this browser.