Inventory turnover calculator.
Enter your annual COGS and average inventory value at cost. See how many times you turn stock per year — and how many days of inventory you're holding.
Your retail numbers
Defaults work for most small shops in the EU.
Turns per year
How this calculator works (the same formula nouz uses)
Inventory turnover measures how many times in a year you sell and replace your average stock. In plain English: for every euro of stock you keep on the shelf at cost, how many euros of goods (also at cost) did you move through it over the year? A higher number means your money isn't sitting still — it's being recovered and reinvested faster.
Turns per year = annual COGS ÷ average inventory at costDays of inventory on hand = 365 ÷ turns
Both sides of the ratio must be measured at cost, not at retail. Mixing a cost figure (COGS) with a retail inventory value inflates the ratio and flatters you. Average inventory is usually (opening stock + closing stock) ÷ 2.
A worked example
Take the defaults in the calculator: €95.000 of annual COGS and €18.500 of average inventory at cost. Turnover is €95.000 ÷ €18.500 = 5,1 turns per year. Days of inventory is 365 ÷ 5,1 ≈ 71 days. So this shop empties and refills its shelves about five times a year, and at any moment it's holding roughly ten weeks of stock. Change either number above and watch it move: cut average inventory to €14.000 on the same sales and turnover jumps to 6,8 while days on hand drop to about 54 — same revenue, less cash asleep.
What a healthy number looks like
As a rule of thumb, most independent retail sits in a 4-8 turns band. Below that, stock is aging; above it, you're lean but risk stock-outs. It varies by category:
| Category | Typical turns / year | Verdict |
|---|---|---|
| Grocery / convenience | 12-20 | Fast — food spoils |
| Fashion / seasonal apparel | 4-6 | Collections rotate |
| Hardware / homeware | 4-8 | Steady |
| Books / specialty | 3-5 | Slow by nature |
The one figure that should worry you is under 3 turns — that's 120+ days of stock, dead-money territory for almost any retailer outside furniture or jewellery. Higher isn't automatically better either: turnover far above your category norm can mean you're constantly under-stocked and losing sales to empty shelves, so read the number against what your goods and lead times realistically allow.
Common mistakes
- Valuing inventory at retail, not cost. COGS is a cost number; your stock must be too, or the ratio is meaningless.
- Using a single snapshot instead of an average. One count taken the day after a big delivery makes turnover look far worse than it really is.
- Reading the store average and stopping there. A healthy 5,1 can hide a few dead SKUs turning 0,5 while your bestsellers turn 15.
- Ignoring the carrying cost of slow stock — the rent, insurance, and markdown risk that low turnover quietly runs up every month.
When to use it — and what's next
Run this whenever you plan a reorder or review a supplier: it's the number that tells a boutique or corner shop whether last season's buy is still working or just occupying shelves. Turnover is one half of the picture — margin is the other. Pair it with the GMROI calculator to see which lines actually earn their keep, and the sell-through rate calculator to catch a bad order before it ages. When you want the whole shop's daily profit tracked automatically instead of glimpsed once a year, that's what nouz for retail does.
Common questions
What does inventory turnover actually measure?
It tells you how many times per year you sell and replace your average stock. For every euro of inventory you hold at cost, it shows how many euros of goods moved through it over the year. A higher number means faster cash recovery and less dead-stock risk; a lower number means money sleeping on shelves.
How do you calculate inventory turnover and days of inventory?
Turns per year equals annual COGS divided by average inventory at cost. Days of inventory on hand equals 365 divided by turns. Both parts of the ratio must be measured at cost, not retail, or the number is inflated and meaningless.
Can you show a worked example?
With the calculator defaults of 95,000 euros annual COGS and 18,500 euros average inventory at cost, turnover is 95,000 divided by 18,500, which is about 5,1 turns per year. Days of inventory is 365 divided by 5,1, roughly 71 days, so the shop holds about ten weeks of stock at any moment.
What is a healthy inventory turnover rate by category?
Most independent retail sits in a 4 to 8 turns band. Grocery and convenience run 12-20 because food spoils, fashion and seasonal apparel run 4-6 as collections rotate, hardware and homeware run 4-8, and books and specialty run 3-5. Under 3 turns is a warning sign for almost any category.
Why is low turnover a silent killer?
3 turns means 120-plus days of inventory sitting on shelves, which is months of rent, insurance, and financing paid on stock that is not earning. It also means markdowns waiting to happen, so the margin you thought you had at order time quietly disappears while the goods age.
Should I value my inventory at cost or at retail?
Always at cost. COGS is a cost figure, so the average inventory it is divided by must be a cost figure too. Using the retail value of your stock mixes two different scales and inflates turnover, making a slow shop look faster than it really is.