Inventory Turnover Calculator
Inventory turnover measures how many times you sell and replace your average inventory over a period. Divide cost of goods sold by average inventory at cost: a higher number means inventory moves faster and ties up less cash. Enter your COGS and average inventory to get your turnover ratio and days instantly.
4–6 turns/yr is typical for many retailers.
The formula
Worked example
With $250,000 of COGS for the year and $40,000 of average inventory at cost: turnover = 250,000 ÷ 40,000 = 6.25×. That's roughly 58 days of inventory on hand — you sell through your stock about six times a year.
Stop calculating by hand
Logistified computes this across your whole Shopify catalog automatically — from live sales data — and turns it into reorder alerts and purchase orders.
Frequently asked
What is inventory turnover?
Inventory turnover is the number of times you sell through and replace your average inventory in a period. It's cost of goods sold divided by average inventory at cost. A higher ratio means stock moves quickly and less cash sits on the shelf; a low ratio can signal overstocking or slow sellers.
What's a good inventory turnover ratio?
It depends heavily on the category, but 4–6 turns per year is typical for many retailers. Grocery and fast-fashion run much higher; furniture, jewelry and industrial goods run lower. Compare against your own history and direct competitors rather than a universal target.
Should I use COGS or revenue in the numerator?
Use cost of goods sold, and value average inventory at cost too. Mixing revenue (which includes margin) with inventory at cost inflates the ratio and makes it incomparable. Keeping both sides at cost gives a true turnover figure.