Measure how many times you sell and replace inventory in a period. Crucial KPI for inventory health.
Annual COGS.
(Beginning Inventory + Ending Inventory) / 2
Inventory Turnover
5.00x
Days Inventory Outstanding (approx.)
73.0 days
COGS
$500000.00
Average Inventory
$100000.00
Formula Used
COGS ÷ Average Inventory
COGS ÷ Average Inventory
Inventory turnover measures how efficiently inventory is sold and replaced. A higher number means faster movement and less capital tied up in stock.
A boutique has $500,000 COGS and average inventory of $100,000. Inventory Turnover = 500,000 ÷ 100,000 = 5x per year. That means the boutique sells through its inventory five times in a year, roughly every 73 days.
It varies by category. Apparel: 4–6x, Grocery: 14–20x, Furniture: 2–4x.
(Beginning Inventory + Ending Inventory) ÷ 2. For more accuracy, use monthly averages.
COGS is more accurate because it removes the markup effect from inventory valuation.
Deep-dive guides that explain the math behind this calculator.
Inventory turnover is the heartbeat of retail. This guide explains the formula, healthy benchmarks by category, and seven tactics that move it.
Set reorder points correctly and stockouts almost disappear. Set them wrong and inventory bloats. Here is the complete operator’s guide.
Safety stock is where most retailers either drown in cash or run out of best-sellers. Here is how to size it with intent — not gut feel.