Inventory turnover calculator
Inventory is cash sitting on a shelf. Turnover measures how fast it turns back into money.
days
days
Inventory turns per year
6.000
- Days of inventory
- 60.8
- Reorder point, at cost
- 57 863.01
- Safety stock value
- 18 410.96
- Rough target inventory
- 38 136.99
- Cash tied up above that
- 41 863.01
- Cost of goods sold per day
- 1315.07
Show the working
- Annual cost of goods sold = 480 000
- Average inventory at cost = 80 000
- Supplier lead time = 30
- Safety stock = 14
- Inventory turns per year = 480 000 / 80 000 = 6
- Days of inventory = 6 > 0 ? 365 / 6 : 0 = 60.8333
- Cost of goods sold per day = 480 000 / 365 = 1315.07
- Reorder point, at cost = 1315.07 * (30 + 14) = 57 863
- Safety stock value = 1315.07 * 14 = 18 411
- Rough target inventory = 1315.07 * (30/2 + 14) = 38 137
- Cash tied up above that = 80 000 - 38 137 = 41 863
Values are shown to six significant figures here; the arithmetic itself runs on exact fractions and is only rounded where a number is printed.
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The formula
- turnover = cost of goods sold / average inventory
- days of inventory = 365 / turnover