Should I use COGS or revenue in the turnover formula?

Use cost of goods sold (COGS), not revenue — turnover measures how efficiently you're cycling through inventory at cost, and using revenue would overstate the ratio since it includes your markup.

What counts as "average inventory" here?

Average inventory should typically be (beginning inventory + ending inventory) ÷ 2 for the period, rather than a single point-in-time snapshot, since stock levels can fluctuate significantly within a year.

Inventory Turnover Calculator

Calculate inventory turnover ratio and days to sell inventory.

How this is calculated

Turnover ratio = COGS ÷ average inventory. Days to sell = 365 ÷ turnover ratio

Assumptions used in this calculation

Annual period, 365-day year: Assumes COGS is an annual figure and uses 365 days per year when converting the turnover ratio into average days to sell inventory.

About this calculator

Calculates the inventory turnover ratio (how many times inventory is sold and replaced over a period) and the average days to sell inventory.

Worked example

COGS ₹5,00,000, avg inventory ₹1,00,000

Result: Turnover = 5×, 73 days to sell

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About this calculator

Frequently asked questions

Should I use COGS or revenue in the turnover formula?

What counts as "average inventory" here?

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