Calculator

How Fast Does Stock Sell?

$500,000 of COGS against $80,000 average inventory turns 6.25 times/year, or about 58 days in inventory. Higher turnover (with no stockouts) means less cash tied up and fresher stock.

Results

Visualization

Cashbizly provides illustrative business estimates only. Results depend on your inputs and assumptions and are not accounting, tax, or legal advice. Consult a CPA or financial advisor before major decisions. Tax-year figures (mileage, QBI, SEP, etc.) are labelled by year and should be verified at IRS.gov.

How It Works

Turnover = COGS / Average Inventory. Days in Inventory = 365 / Turnover. High turnover indicates efficient use of working capital but risks stockouts; too low signals overstocking or dead stock. Benchmarks vary widely by industry (grocery turns fast, furniture slow).

What Should You Do?

Scenario 1: cutting average inventory to $60k lifts turnover to 8.3 and frees $20k of cash. Scenario 2: a 2-turn rate in a fast category signals obsolescence risk. Scenario 3: pair with EOQ/Reorder Point to keep turnover high without stockouts.

Frequently Asked Questions

What is a good turnover?

Industry-specific — grocery 10-15+, furniture 2-4. Compare within your category, not across.

COGS or sales?

Use COGS (not sales) for turnover so the ratio reflects cost-based inventory.

High turnover always good?

Not if it causes stockouts; the goal is efficient, not maximal, turnover.

Authoritative References

Investopedia — Inventory Turnover — Turnover and days-in-inventory formula.
Corporate Finance Institute — Inventory — Inventory efficiency metrics.