Inventory Analysis Calculator
Use this calculator to determine how much inventory you should hold, and efficient timing of your inventory orders.
How the inventory analysis calculator works
It divides your annual cost of goods sold by your average inventory to find how many times a year you sell through stock, then converts that into the average number of days inventory sits on hand.
Worked example: with cost of goods sold (annual) of $600,000 and average inventory value of $90,000, the inventory analysis calculator shows inventory turnover of 6.7×.
- Turnover ratio
- 6.67×
- Days inventory on hand
- 55 days
- Annual COGS
- $600,000
- Average inventory
- $90,000
The formula
Inventory turnover = annual COGS ÷ average inventory. Days inventory on hand = 365 ÷ turnover.
Results are estimates for educational purposes and are not financial advice. Confirm exact figures with your lender, plan administrator or advisor.
Questions about the inventory analysis calculator
What is a good inventory turnover ratio?
It varies widely by industry — grocers turn over inventory many times a year, jewellers far fewer. Compare against peers; higher generally means leaner, more efficient stock.
Why does inventory turnover matter?
Inventory ties up cash and incurs storage and obsolescence costs. Faster turnover frees working capital, while slow turnover signals overstocking or weak demand.
Can turnover be too high?
Yes — extremely high turnover can mean you are understocked and losing sales to stockouts. The goal is efficient stock that meets demand without excess.
Is the Inventory Analysis Calculator free to use?
Yes. Every calculator on FinCalculators is completely free, with no sign-up, login or paywall. You can run as many scenarios as you like.