GlenCalc

Inventory turnover calculator

Turnover shows how many times you sell through your stock in a year. Add order and holding costs to find the order size that minimizes total cost.

Your answer

Inventory turnover6 ×
Days of inventory61 days
Average inventory$80,000.00
Economic order quantity671 units
Orders per year17.9

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How we worked it out

Updated as you change the numbers.

  1. Turnover = COGS ÷ average inventory. Days = 365 ÷ turnover. EOQ = √(2 × demand × order cost ÷ holding cost).

Method and assumptions

Healthy turnover depends on the industry: grocers turn stock many times a year, furniture stores a few. EOQ balances ordering costs against the cost of holding stock.

Questions

What is the turnover with $480,000 COGS and $80,000 average inventory?

6 times a year, or about 61 days of inventory.

Sources

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