Inventory Turnover Calculator
Enter your cost of goods sold and average inventory, and calculate your inventory turnover ratio and days inventory outstanding (DIO) in one step. See how long cash sits locked in stock and spot dead-stock risk early.
Last updated: July 2026Calculation method and sources
The cost (not the sale price) of the products sold during the period.
Inventory carried at cost. A quick estimate: (opening + closing stock) / 2.
365 for a full year, 90 for a quarter, 30 for a month.
Inventory turnover
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Stock turns over per period
- Days inventory outstanding (DIO)
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A healthy turnover level varies by sector and business model. For a firm read, compare against your own past periods and your sector average, and verify your COGS from your own records.
What is inventory turnover?
Inventory turnover measures how many times you sell through and replenish your stock over a period. It is one of the clearest signals of how efficiently your working capital is used: the faster stock turns, the less cash sits idle on the shelf. Two figures describe the same thing — the turnover ratio (how many times) and days inventory outstanding, DIO (how many days).
| Measure | Formula | Example |
|---|---|---|
| Turnover ratio | COGS / average inventory | 1,200,000 / 300,000 = 4× |
| Days inventory outstanding (DIO) | period days / turnover ratio | 365 / 4 = 91.25 days |
In this example the stock turns over 4 times a year and a product sits on the shelf for about 91 days on average. Keep both sides at cost value: use cost of goods sold (not revenue) in the numerator, and inventory valued at cost in the denominator — otherwise the ratio comes out inflated.
How to read the result
A low turnover (long DIO) means cash is locked in stock: carrying, storage and opportunity costs run while the product ages, and dead-stock risk grows. A high turnover (short DIO) means capital is used efficiently — but pushed too far it brings stock-outs and missed sales. There is no single right number; the healthy level depends on your sector, margins and product mix. The most useful comparison is against your own past periods and your sector average.
Turnover, cost and cash flow
Turnover starts with the right cost base. Your COGS is only as accurate as your unit product cost, so build it up first with the product cost calculator. On a marketplace, slow-moving stock quietly eats into profit through discounts and returns — to see your real net margin per sale after commission, shipping and VAT, use the Trendyol profit calculator, and to price a clearance campaign without slipping below break-even, check the profit margin calculator.
Frequently Asked Questions
How is inventory turnover calculated?
Inventory turnover = Cost of Goods Sold (COGS) / Average inventory value. You divide the cost of the products you sold during the period by the average cost of the stock you held. For example, if period COGS is 1,200,000 TL and average inventory is 300,000 TL, the turnover ratio is 4 — the stock was sold and replenished about 4 times during the period.
What does days inventory outstanding (DIO) mean, and how do you find it?
Days inventory outstanding is the average number of days a product sits on the shelf before it sells. Formula: DIO = period length in days / turnover ratio. With a turnover of 4 over 365 days, DIO = 365 / 4 = 91.25 days. Turnover ratio and DIO are two expressions of the same fact: higher turnover means fewer days.
How do I calculate average inventory value?
A practical method: (opening stock + closing stock) / 2. If your stock swings a lot, averaging monthly stock values gives a more accurate result. Value the stock at cost, not at sale price, because COGS is also measured at cost and both sides must sit on the same base.
Can I use revenue (sales) instead of COGS?
It is not recommended. If you compute turnover as revenue / average inventory, the ratio comes out inflated because revenue also carries your profit margin. For a correct and comparable result, take both the numerator (COGS) and the denominator (inventory) at cost value.
What is a good inventory turnover ratio?
There is no single right number; a healthy level depends on your sector and business model. Fast-moving, low-priced products show high turnover and short DIO, while slow-selling, high-priced or seasonal products normally turn over more slowly. Comparing against your own past periods and your sector average is more meaningful than chasing one fixed threshold.
Why is low inventory turnover risky?
Low turnover means cash stays locked in stock for a long time: while money sits on the shelf, carrying, storage and opportunity costs pile up; products age, seasons pass and dead-stock risk grows. Very high turnover is not always good either — it brings the risk of stock-outs and missed sales. The goal is the most efficient balance you can hold without running out of stock.
Guide on This Topic
What Is Inventory Turnover and How Is It Calculated? (Formula + Example)
What is inventory turnover, and how do you calculate the turnover ratio and days inventory outstanding (DIO)? A step-by-step example using COGS and average inventory, the risks of low/high turnover, an ideal range for marketplace sellers, and how to clear dead stock.
Read the guideE-Commerce Inventory Management Across Channels
How to manage e-commerce inventory: ABC analysis, safety stock and reorder points, FIFO, stock turnover, and the part that actually breaks sellers — multi-channel stock sync across 10 marketplaces from one pool.
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