Inventory Turnover Calculator
Calculate how efficiently you are converting inventory into sales. Enter your COGS and inventory values to get your turnover ratio and days on hand.
What is Inventory Turnover?
Inventory turnover measures how many times your inventory is sold and replaced over a given period. A higher turnover means you are selling goods quickly and not tying up capital in unsold stock. A lower turnover may indicate overstocking, weak sales, or obsolete inventory.
Formula
Inventory Turnover = COGS / Average Inventory
Average Inventory = (Beginning Inventory + Ending Inventory) / 2
Days Sales of Inventory (DSI)
DSI tells you how many days it takes, on average, to sell through your inventory. Lower is generally better — it means your cash is not sitting on shelves.
Formula
DSI = 365 / Inventory Turnover
Industry Benchmarks
| Industry | Typical Turnover | DSI |
|---|---|---|
| Grocery / Perishables | 14 – 20× | 18 – 26 days |
| General Wholesale | 6 – 12× | 30 – 60 days |
| Industrial Distribution | 4 – 8× | 45 – 90 days |
| Retail (general) | 8 – 12× | 30 – 45 days |
| Electronics | 5 – 10× | 36 – 73 days |
How to Improve Inventory Turnover
- Identify and liquidate dead stock — products that have not moved in 6+ months
- Improve demand forecasting to avoid over-ordering
- Negotiate shorter lead times with suppliers
- Implement just-in-time (JIT) replenishment for fast movers
- Review pricing on slow movers — sometimes a margin cut moves stale inventory
- Track turnover by SKU, not just in aggregate — your average hides the outliers
Track turnover per SKU, per warehouse
Loumia calculates inventory turnover and DSI at the SKU level across all your warehouses — with dead stock alerts and aging reports built in.
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