Inventory Turnover & Days
Inventory turnover from cost of goods sold and average stock, days of inventory outstanding, the annualised rate for a short period, and GMROI from sales.
Turnover (times per period), days inventory outstanding, average inventory from opening and closing values, the annualised turnover and gross-margin return on inventory — ratios only, not judged.
Example: 600,000 cost of goods sold against stock that went from 90,000 to 110,000 turns 6 times a year — 60.8 days of inventory; on 1,000,000 of sales the GMROI is 4.0.
Textbook ratios,
left unjudged.
The definitions used, the averaging choice, and why no benchmark is offered.
Definitions
Turnover = cost of goods sold ÷ average inventory, both at cost from the same books; days inventory outstanding = days in the period ÷ turnover. Using sales instead of COGS overstates turnover by the margin, so the page asks for COGS. A short period is annualised by 365 ÷ days for comparison with yearly figures.
Average inventory
The default average is (opening + closing) ÷ 2. For a seasonal business that two-point average can be far from the truth; enter a monthly average directly and it overrides the pair.
GMROI and benchmarks
Gross margin return on inventory = (sales − COGS) ÷ average inventory, when you give sales. Whether any of these figures is good depends on the trade — grocers and jewellers live at opposite ends — so the page offers no benchmark. Nothing leaves the browser; the same four anonymous usage counts as the rest of the site apply.
SOURCES
- Turnover = COGS ÷ average inventory; DIO = days ÷ turnover; GMROI = gross profit ÷ average inventory — standard accounting ratio definitions
Last reviewed 20 September 2026. How results are checked: How we verify.