Inventory Turnover Calculator
Turnover = COGS ÷ average inventory
Enter both for your turnover ratio and days of inventory on hand.
TL;DR Inventory turnover = COGS ÷ average inventory $2.4M COGS on $400K average inventory is 6.0× turnover, about 61 days of inventory on hand. Many consumer-brand SKUs target 4–8× turnover (45–90 days) as of Q3 2026; slower turns tie up working capital.
Inventory turnover
6.0×
Days inventory
60.8 days
The formula
Inventory turnover = COGS ÷ average inventory · Days inventory = period ÷ turnover
Worked example
A consumer brand records $2,400,000 of annual COGS and carries $400,000 of average inventory. Turnover = $2,400,000 ÷ $400,000 = 6.0×, and days inventory = 365 ÷ 6 = 60.8 days. That is roughly two months of stock on hand before it sells through.
Typical inventory turnover by category (indicative, as of Q3 2026)
| Category | Typical turnover | Typical days |
|---|---|---|
| Fresh / perishable food | 12× – 26× | 14 – 30 days |
| Packaged food & beverage | 6× – 10× | 36 – 60 days |
| Health & beauty | 4× – 8× | 45 – 90 days |
| Durable goods | 3× – 6× | 60 – 120 days |
Ranges are indicative national figures for stabilized assets and vary by market, brand, and condition. For preliminary planning only; not an offer of credit.
Frequently asked questions
How do you calculate inventory turnover?
Inventory turnover = cost of goods sold ÷ average inventory. A brand with $2,400,000 of annual COGS carrying $400,000 of average inventory turns 2,400,000 ÷ 400,000 = 6.0 times per year.
What is days inventory outstanding (DIO)?
Days inventory outstanding is the average number of days inventory sits before it sells: DIO = period ÷ turnover, using 365 for a full year. At 6.0× turnover that is 365 ÷ 6 ≈ 60.8 days. It is one leg of the cash conversion cycle.
What is a good inventory turnover ratio?
It depends on the category, but as of Q3 2026 many consumer-brand SKUs target 4× to 8× turnover, roughly 45 to 90 days of inventory on hand. Perishable food turns much faster, while durable goods turn slower.
How does inventory turnover affect working capital?
Slower turns tie up more cash in unsold inventory, increasing working capital needs. Faster turns free up cash and shorten the cash conversion cycle, so improving turnover is one of the most direct ways to reduce the capital locked in a business.