How it works
Inventory turnover counts how many times you sell through your average stock in a period. Days of inventory turns that around: how many days the stock you're holding would last at your current pace.
Example. Over a year, a store's cost of goods sold is $180,000. It started the year with $28,000 of inventory and ended with $32,000, so average inventory is $30,000.
That's 6.0 turns a year, or about 61 days of stock on hand.
Higher isn't always better
Faster turns mean less cash sitting on the shelf, fresher product and less risk of items going stale or out of date. But turns that are too high can mean the shelves are too thin, and empty facings are lost sales. The goal is the fastest turn that still keeps you in stock.
Turnover varies a lot by category. Milk, bread and fountain cups turn constantly, while motor oil and phone chargers sit for weeks. Comparing a category against itself over time tells you more than a single store-wide number.
Use cost on both sides
Cost of goods sold is at cost, so inventory has to be at cost too. If you divide sales at retail by inventory at cost, the turns come out inflated. If you don't have cost of goods sold handy, the cost of goods sold calculator works it out from counts and purchases.
Common questions
- Can I use a month instead of a year?
- Yes. Choose month or quarter and the calculator shows the turns for that period, the days on hand, and what the pace adds up to over a year.
- What's the link to GMROI?
- Turnover tells you how fast stock moves. GMROI combines that speed with your margin to show how much profit each dollar of inventory earns. Try the GMROI calculator.
Last updated October 11, 2026.