Inventory Turnover Calculator


Instructions: You can use our Inventory Turnover Calculator, by providing the Cost of Goods Sold \((COGS)\), the current inventory and the previous inventory in the form below:

Cost of Goods Sold \((COGS)\) =
Current Inventory =
Previous Inventory =

Inventory Turnover Calculator

More about the inventory turnover so you can better use the results provided by this solver. The inventory turnover is the ratio between the cost of goods sold and the average inventory. This ratio is a measure of asset management, and it indicates the number many times a firm turns its inventory. It is computed using the following formula:

\[ \text{Inventory Turnover} = \displaystyle \frac{\text{Cost of Goods Sold}}{\text{Average Inventory}}\]

Observe that, and this is a point that often brings confusion, the formula uses the average inventory, and just the last inventory.

What is the ideal inventory turnover ratio for a company?

The Inventory Turnover Ratio is a commonly used financial ratio to measure efficiency in asset management. You can find other financial ratio calculators in our site, such as our current ratio, quick ratio, and our inventory turnover calculator.

Observe that the Cost of Goods Sold are also used to compute the Days' Sales in Inventory, another useful efficiency ratio.




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