Inventory Turnover Calculator – Measure Stock Efficiency Online

Inventory Turnover

Enter COGS and stock values

Cost of Goods Sold (COGS) (₹) Total purchase cost of goods sold during the period

Opening Stock Value (₹)

Closing Stock Value (₹)

Period

Inventory Turnover Ratio

0.00x

Days Inventory Outstanding

0 days

Average Inventory

₹0

Stock Health

—

Days Remaining

0 days

💡 Business Impact

Slow inventory turnover locks working capital and increases holding costs. Every extra day of inventory sitting on shelves costs money in storage, insurance, and opportunity cost.

📊 Industry Benchmark

Inventory Turnover Benchmarks: FMCG 8–12x/yr | Apparel 4–6x | Electronics 6–10x | Pharma 6–8x

Recommended Actions

✓ Review stock aging report weekly

✓ Identify and clear slow-moving SKUs

✓ Optimise reorder quantities based on actual demand

✓ Compare turnover across categories to find laggards

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Formula & How It Works

Average Inventory = (Opening Stock + Closing Stock) ÷ 2
Inventory Turnover Ratio = COGS ÷ Average Inventory
Days Inventory Outstanding (DIO) = Period Days ÷ Turnover Ratio

COGS is the cost of goods sold — your purchase price, not your selling price. Using COGS gives a more accurate turnover than using revenue.

Worked Example

Scenario: Annual COGS = ₹36L, Opening Stock = ₹4L, Closing Stock = ₹6L.

Average Inventory = (₹4L + ₹6L) ÷ 2 = ₹5L

Turnover Ratio = ₹36L ÷ ₹5L = 7.2x per year

DIO = 365 ÷ 7.2 = 51 days

A 7.2x annual turnover means your stock sells and is replaced every 51 days. For most retail categories, this is a healthy number.

When to Use This Calculator

Identify slow-moving categories that tie up working capital
Set inventory targets for buying team — aim for 8–12x for FMCG
Compare turnover month-on-month to spot seasonal trends
Justify reorder decisions to management or investors
Feed into purchase planning and open-to-buy calculations

Frequently Asked Questions

What is inventory turnover? +

Inventory turnover measures how many times your average inventory is sold and replaced within a period. A higher ratio means stock moves faster, which is generally better.

What is a good inventory turnover ratio? +

It varies by industry. FMCG: 12–20x/year. Garments: 4–6x. Electronics: 6–8x. Supermarkets: 20–30x. Jewellery: 1–2x. Compare with your industry average.

What is Days Inventory Outstanding (DIO)? +

DIO = 365 ÷ Inventory Turnover Ratio. It tells you how many days your current stock will last at the current rate of sales. Lower DIO means faster-moving inventory.

How do I reduce dead stock using this metric? +

If your DIO is very high (e.g., 120+ days), it signals slow-moving inventory. Use the Dead Stock Calculator and Stock Aging Calculator to identify which products need clearance action.

Should I use COGS or sales revenue for inventory turnover? +

Use COGS (Cost of Goods Sold) for the most accurate inventory turnover calculation. Using revenue overstates the ratio because it includes your margin.