Inventory Turnover Calculator

Calculate inventory turnover ratio, days sales of inventory (DSI), GMROI, carrying cost, reorder point, and safety stock. Compare to industry benchmarks.

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Inventory Turnover Ratio
Days Sales of Inventory
Monthly Turnover
Extended More scenarios, charts & detailed breakdown
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Turnover Ratio
Average Inventory
Days Sales of Inventory
Professional Full parameters & maximum detail
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Turnover Metrics

Average Inventory
Turnover Ratio
Days Sales of Inventory
Weeks of Supply

Profitability

Gross Margin %
GMROI
Annual Carrying Cost

Replenishment

Reorder Point
Safety Stock Estimate

How to Use This Calculator

  1. Enter your annual COGS and average inventory value.
  2. Use the Annual tab to calculate average from beginning and ending inventory.
  3. Use By Product to compare turnover across 3 product lines.
  4. Use Benchmark to compare your ratio to industry averages.

Formula

Inventory Turnover = COGS ÷ Average Inventory

DSI = 365 ÷ Turnover Ratio

GMROI = Gross Profit ÷ Average Inventory

Reorder Point = Daily Usage × Lead Time

Example

Example: COGS $600K, Avg Inventory $120K → Turnover 5×, DSI 73 days. Revenue $900K → Gross Profit $300K, GMROI 2.5. Below retail average of 8× — opportunity to reduce stock or increase sales velocity.

Frequently Asked Questions

  • Inventory Turnover = COGS ÷ Average Inventory. It shows how many times inventory is sold and replaced in a period. Higher is generally better, indicating efficient stock management.
  • DSI = 365 ÷ Inventory Turnover. It shows how many days it takes to sell the average inventory on hand. Lower DSI = faster-moving stock.
  • GMROI (Gross Margin Return on Inventory) = Gross Profit ÷ Average Inventory Cost. It measures how much gross profit you earn for every dollar invested in inventory. A GMROI above 1.0 is the minimum; top retailers aim for 3.0+.
  • It varies by industry: Grocery ~14×, E-commerce ~10×, Retail ~8×, Manufacturing ~6×, Wholesale ~5×. Compare your ratio to your specific sector average.
  • Reorder Point = Daily Usage × Lead Time. It is the inventory level at which you should place a new order so stock arrives before you run out.

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