How fast does my stock sell? Inventory turnover calculator
Enter the cost of the goods you sold in a period and your stock value at the start and end of it. The calculator shows how many times your inventory turned over and how many days, on average, an item waits before it is sold.
Calculator
What the goods you sold cost you, not their sales value.
365 for a year, 90 for a quarter, 30 for a month.
Result
- Inventory turnover (times)
- Average days in stock
- Average inventory
The calculation runs in your browser; the numbers you enter are not sent anywhere.
Inventory turnover = cost of goods sold ÷ average inventory. Days in stock = days in the period ÷ turnover. A shop that sold goods costing 240,000 in a year while holding 40,000 of stock on average turns its inventory 6 times, about every 61 days.
The formula and why it uses cost
Turnover compares what flowed out of your stock with what you kept on hand. Both sides have to be measured the same way, which is why the calculation uses cost of goods sold rather than sales revenue: your stock is valued at what you paid for it, not at the shelf price.
The calculator works with these formulas:
- Average inventory = (opening stock + closing stock) ÷ 2
- Inventory turnover = cost of goods sold ÷ average inventory
- Average days in stock = days in the period ÷ inventory turnover
Reading the result
There is no single good number: fresh food has to turn over every few days, while hardware or spare parts can sit for months and still be profitable. The useful comparison is with your own past periods, between product groups, and against how long your supplier gives you to pay.
As a rough guide for a yearly period:
| Turnover per year | Days in stock | What it often means |
|---|---|---|
| 12 | about 30 | Stock is bought and sold roughly every month |
| 4 | about 91 | Stock is replaced roughly every quarter |
| 1.5 | about 243 | Slow: a lot of cash is tied up on the shelves |
Getting the numbers right
Use stock values at cost on both dates, and the same period for all three inputs. If your stock swings a lot during the year, for example before a holiday season, opening and closing values may not reflect a typical month; an average of monthly values is then more accurate.
Turnover for the whole shop can hide problems. A fast-moving group can make the total look fine while a few slow items quietly tie up money. Calculate it for your main product groups too, and look closely at the slowest ones.
Practical scenario
Example: a household goods shop over one year
A shop sold goods that had cost it 240,000 during the year. It held stock worth 35,000 at cost on 1 January and 45,000 on 31 December, so average inventory is 40,000. Turnover is 240,000 ÷ 40,000 = 6 times a year, and an item spends 365 ÷ 6 ≈ 61 days on the shelf on average.
Step-by-Step Implementation
1. Take cost of goods sold for the period
Use the cost of what you sold, not the sales total. A profit and loss report usually shows it as cost of sales.
2. Enter stock value at cost
Enter the stock value at the start and end of the period, or an average if you have one. Choose the number of days in the period.
3. Get the figures from GiroPS
GiroPS's profit and loss report shows cost of goods sold at weighted average cost for any date range, and the stock report gives the value of tracked stock at cost. Regular stock counts keep both figures close to what is really on the shelves.
Common Pitfalls & How to Avoid Them
Frequently Asked Questions
What is a good inventory turnover?
It depends on what you sell. Perishable goods need a high turnover, durable goods can turn more slowly. Compare with your own previous periods and with your supplier payment terms rather than with a general benchmark.
How do I convert turnover into days?
Divide the number of days in the period by the turnover. A turnover of 8 in a year means stock stays about 365 ÷ 8 ≈ 46 days.
Can I use sales instead of cost of goods sold?
Only if you also value stock at selling prices. Mixing sales with stock at cost overstates turnover by roughly your markup.
What does a falling turnover tell me?
Stock is growing faster than sales: purchases are too large, some items have stopped selling, or a season ended. Look at the slowest products first.