{
  "slug": "inventory-turnover",
  "title": "Inventory Turnover Calculator",
  "heading": "Inventory Turnover Calculator",
  "category": "financial",
  "url": "https://www.revenuelab.fyi/toolbox/inventory-turnover",
  "summary": "Turns per year, days of inventory, and cash tied up.",
  "description": "Turnover shows how many times you sell through your stock in a year. Low turns mean cash sitting on shelves; very high turns mean you are probably stocking out and losing sales.",
  "formula": "Turnover = COGS ÷ Average inventory. Days on hand = 365 ÷ Turnover.",
  "dateModified": "2026-09-30",
  "run_url": "https://www.revenuelab.fyi/api/public/calc?tool=inventory-turnover",
  "inputs": [
    {
      "id": "cogs",
      "label": "Annual cost of goods sold",
      "kind": "number",
      "hint": null,
      "default": 720000,
      "unit": "$",
      "min": 0,
      "max": null
    },
    {
      "id": "avgInventory",
      "label": "Average inventory value",
      "kind": "number",
      "hint": null,
      "default": 120000,
      "unit": "$",
      "min": 1,
      "max": null
    },
    {
      "id": "carryRate",
      "label": "Annual carrying cost rate",
      "kind": "number",
      "hint": null,
      "default": 22,
      "unit": "%",
      "min": 0,
      "max": 60
    }
  ],
  "outputs": [
    {
      "id": "turns",
      "label": "Inventory turns per year",
      "format": "decimal",
      "hint": null,
      "primary": true
    },
    {
      "id": "days",
      "label": "Days of inventory on hand",
      "format": "decimal",
      "hint": null,
      "primary": false
    },
    {
      "id": "carryingCost",
      "label": "Annual carrying cost",
      "format": "currency",
      "hint": null,
      "primary": false
    },
    {
      "id": "cashTied",
      "label": "Cash tied up in stock",
      "format": "currency",
      "hint": null,
      "primary": false
    }
  ],
  "worked_example": {
    "inputs": [
      "Annual cost of goods sold: 720000 $",
      "Average inventory value: 120000 $",
      "Annual carrying cost rate: 22 %"
    ],
    "outputs": [
      "Inventory turns per year: 6",
      "Days of inventory on hand: 60.8",
      "Annual carrying cost: $26,400.00",
      "Cash tied up in stock: $120,000.00"
    ]
  },
  "how_to": {
    "title": "How to use this",
    "steps": [
      "Enter annual cost of goods sold ($).",
      "Enter average inventory value ($).",
      "Enter annual carrying cost rate (%).",
      "Read your inventory turns per year on the right — it updates as you type.",
      "Hit Share to keep the scenario or send it to someone."
    ]
  },
  "scenarios": [
    {
      "name": "Conservative",
      "description": "Lower-end numbers — what if things land soft?",
      "values": {
        "cogs": 430000,
        "avgInventory": 70000,
        "carryRate": 13
      }
    },
    {
      "name": "Typical",
      "description": "Defaults — the most common real-world setup.",
      "values": {
        "cogs": 720000,
        "avgInventory": 120000,
        "carryRate": 22
      }
    },
    {
      "name": "Ambitious",
      "description": "Higher-end numbers — what if things really pop?",
      "values": {
        "cogs": 1150000,
        "avgInventory": 190000,
        "carryRate": 35
      }
    }
  ],
  "limitations": [
    "Results are estimates before tax, fees, and inflation unless an input explicitly covers them.",
    "Rates are treated as fixed for the whole period — variable-rate products will drift from this projection.",
    "This is educational maths, not financial advice. Check anything contractual with the lender or your accountant."
  ],
  "faq": [
    {
      "q": "How does the inventory turnover calculator work?",
      "a": "Turnover shows how many times you sell through your stock in a year. Low turns mean cash sitting on shelves; very high turns mean you are probably stocking out and losing sales. The underlying maths is: Turnover = COGS ÷ Average inventory. Days on hand = 365 ÷ Turnover."
    },
    {
      "q": "What do I need to enter?",
      "a": "3 values: annual cost of goods sold, average inventory value, and annual carrying cost rate. Each field starts with a sensible default, so you can change one number at a time and watch the result move."
    },
    {
      "q": "What does the inventory turns per year result mean?",
      "a": "It is returned as a decimal number and updates live as you edit the inputs, so you can compare two or three versions of a scenario in a few seconds."
    },
    {
      "q": "Is this calculator free, and do I need an account?",
      "a": "Yes, it's free, and no account is required. Nothing you type is stored on our servers — the maths runs entirely in your browser."
    },
    {
      "q": "How accurate is the result?",
      "a": "It applies the standard formula exactly, so the arithmetic is precise. Results are estimates before tax, fees, and inflation unless an input explicitly covers them."
    },
    {
      "q": "Who is this tool for?",
      "a": "It's built for anyone comparing money scenarios before committing — budgeting a payment, sanity-checking a quote, or seeing what a change in rate or term actually costs."
    }
  ],
  "related": [
    "https://www.revenuelab.fyi/toolbox/reorder-point",
    "https://www.revenuelab.fyi/toolbox/shipping-cost",
    "https://www.revenuelab.fyi/toolbox/margin"
  ],
  "license": "CC-BY-4.0",
  "citation": "RevenueLab — Inventory Turnover Calculator (https://www.revenuelab.fyi/toolbox/inventory-turnover)"
}