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Inventory Turnover Calculator

Enter COGS and average inventory to compute your turnover ratio, days of supply, and see how you compare to industry benchmarks.

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How do you calculate inventory turnover ratio?

Inventory turnover ratio is calculated by dividing the Cost of Goods Sold (COGS) by average inventory value over the same period. A turnover of 6x means you sell and replace your entire inventory six times per year — equivalent to about 61 days of supply. Higher turnover generally means healthier inventory management, but the target varies by industry. Demand OS tracks turnover at the SKU level and flags slow-moving inventory that drags down the ratio.

Calculator

Enter COGS and average inventory

Formula used

Inventory Turnover = COGS / Average Inventory
Days of Supply = 365 / Inventory Turnover

Industry benchmarks

Retail8–12x
Manufacturing4–8x
Distribution / Wholesale6–12x
CPG / FMCG8–15x
Pharmaceutical2–5x
Ecommerce8–20x

Results

Enter COGS and inventory data, then click “Calculate Turnover”.

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Frequently Asked Questions

Inventory turnover, answered

What is a good inventory turnover ratio?+
It depends on the industry. Grocery and FMCG companies typically turn inventory 8–15 times per year; general retail 8–12x; manufacturing 4–8x; distribution 6–12x; pharmaceutical 2–5x. A ratio significantly below your industry benchmark suggests excess inventory or slow-moving stock. A ratio significantly above may indicate lean operations — or stockout risk if safety stock is too thin.
Should I use COGS or revenue for inventory turnover?+
Use COGS (Cost of Goods Sold), not revenue. Revenue includes markup, which inflates the turnover ratio and makes comparisons misleading. COGS reflects the actual cost of inventory that flowed through the business, making it a like-for-like comparison with average inventory value on the balance sheet.
How do I calculate average inventory?+
The simplest method is (beginning inventory + ending inventory) / 2 for the same period as your COGS. For more accuracy, use the average of monthly ending inventory values over the year. If your business is seasonal, the 12-month average is more representative than a two-point average.
What is days of supply and how does it relate to turnover?+
Days of supply is 365 divided by the inventory turnover ratio. It tells you how many days your current inventory would last at the current rate of sales. If your turnover ratio is 6x, your days of supply is about 61 days. This is often a more intuitive metric for planners than the abstract ratio.
How does Demand OS improve inventory turnover?+
Demand OS improves turnover by reducing excess inventory without increasing stockout risk. It identifies slow-moving SKUs, right-sizes safety stock using AI-driven demand variance (not last year's average), and generates replenishment recommendations that keep inventory lean. The system tracks turnover at the SKU level so planners can focus action where the working capital is stuck.

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Ready to see where inventory is stuck?

Demand OS tracks turnover at the SKU level, flags slow movers, and generates replenishment recommendations that keep working capital lean.

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