Can beginning or ending inventory be zero?

Yes, provided their average is greater than zero.

Is days inventory a forecast?

No. It is a reciprocal of historical turnover using the entered period length.

Does a higher turnover always mean better performance?

No. It can reflect efficient movement, but it can also coincide with stockouts or inadequate safety stock.

Inventory Turnover and Days Calculator

Measure how often modeled inventory is sold or used during one reporting period.

Turnover ratio

Two-point average inventory

Approximate days inventory

CurrencyCost of goods soldCOGS for the same accounting period as the inventory balances.Beginning inventoryEnding inventoryDays in reporting periodUse the actual period length or a consistent convention such as 365 or 360.

How to Calculate Inventory Turnover

Enter COGS and inventory values measured on the same accounting basis.

Choose a display currency; no conversion is performed.

Match periods and valuation methods

Do not mix annual COGS with monthly balances or inventory measured under different accounting policies.

What Inventory Turnover Means

Turnover compares period COGS with average inventory. A higher ratio means more COGS relative to the average balance, but whether that is desirable depends on availability, margins, lead times, seasonality, and industry. Days inventory is the reciprocal expressed over the entered period.

Inventory Turnover Examples

Four inventory turns

Period COGS and inventory

costOfGoodsSold:500000

beginningInventory:100000

endingInventory:150000

daysInPeriod:365

Turns and days

4 turns; 91.25 days

Average inventory is 125,000 and 500,000 divided by 125,000 is 4.

No COGS in the period

Period COGS and inventory

costOfGoodsSold:0

beginningInventory:10000

endingInventory:10000

daysInPeriod:365

Turns and days

0 turns; days undefined

Days inventory cannot divide by zero turnover.

Compare like with like

Trend the same definition over time or compare with businesses using compatible accounting and product mixes.

Frequently Asked Questions

Inventory is carried at cost, so COGS generally provides a more consistent numerator than selling-price revenue.

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Inventory Turnover Formula

The accounting definition uses COGS divided by average inventory; this tool approximates average inventory from two balances.

Imperial:For imperial units: days inventory = days in period ÷ turnover

Formula

average inventory = (beginning inventory + ending inventory) ÷ 2

Average inventory

average inventory = (beginning inventory + ending inventory) ÷ 2

Inventory turnover

turnover = cost of goods sold ÷ average inventory

Days inventory

days inventory = days in period ÷ turnover

Scientific Background

Assumptions: book COGS and inventory share a period, currency, valuation basis, and business scope. Limitations: a beginning/end average can conceal intra-period volatility, and this descriptive ratio does not identify obsolete stock, stockouts, supplier lead time, or an optimal target.