How do I calculate inventory turnover?

Divide annual cost of goods sold (COGS) by average inventory value. For example, $500,000 COGS over $100,000 average inventory gives a ratio of 5.0x.

What is a good turnover ratio?

It depends on the industry. Retail often targets 4x to 8x, while grocery turns much faster. Benchmark against peers and track the trend over time.

What is days inventory outstanding (DIO)?

It is the average number of days inventory sits before it sells: 365 divided by the turnover ratio. A 5.0x ratio is about 73 days.

Should I use retail price or cost?

Use cost figures (COGS and inventory value at cost). Mixing retail price with cost distorts the ratio.

Free Tool · Updated June 30, 2026

Inventory Turnover Calculator

Measure how many times you sell through inventory in a year, and in how many days. Divide cost of goods sold by average inventory value. Free, no email.

Annual COGS ($) Cost of goods sold over the year

Average inventory value ($) Average value held at cost

Inventory turnover5x73 days inventory outstanding

Turnover ratio5x

Days inventory outstanding (DIO)73 days

Use cost figures (COGS), not retail prices, for both inputs so the ratio is consistent.

Optimize Inventory in Odoo →

Turnover ratio in one calculationAnnual COGS divided by average inventory value, to see how many times you sell through stock each year.
Days inventory outstandingThe calculator also turns the ratio into days: 365 divided by the turnover ratio.
Benchmark against your industryA good ratio depends on industry, retail often targets 4x to 8x. Track the trend over time.

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How This Calculator Works

Inventory turnover is calculated as annual cost of goods sold (COGS) divided by average inventory value. A ratio of 5.0x means you sold through the equivalent of your inventory five times in the year. Days inventory outstanding (DIO) turns that ratio into days: 365 divided by the ratio. Use cost figures on both sides so the ratio stays consistent.

How This Maps to Odoo Inventory

Odoo Inventory tracks stock valuation in real time and feeds COGS into accounting through automated valuation. Inventory analysis reports and dashboards surface average value and turnover without manual spreadsheets. Octura sets up valuation, product categories, and reporting so this ratio is reliable and current.

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How this calculation is made

The Octura Inventory Turnover Calculator is calculated as annual cost of goods sold ÷ average inventory value, giving the number of times stock turns over in a year, and 365 ÷ that ratio to give days of inventory on hand.

Backed by real migrations

Numbers like yours, validated on real migrations

These are three engagements where the projection actually turned into operational reality on Odoo, and the full case studies live on the migration service page.

ManufacturingV12 → V17
Industrial Manufacturer, Texas
12custom modules carried over, zero data lost
DistributionV14 → V18
Wholesale Distributor, Quebec
30%faster page loads once the upgrade shipped
Professional ServicesCE → Enterprise
Consulting Firm, Brussels
0hproduction downtime during cutover

Frequently Asked Questions

01
How do I calculate inventory turnover?
Divide annual cost of goods sold (COGS) by average inventory value. For example, $500,000 COGS over $100,000 average inventory gives a ratio of 5.0x.
02
What is a good turnover ratio?
It depends on the industry. Retail often targets 4x to 8x, while grocery turns much faster. Benchmark against peers and track the trend over time.
03
What is days inventory outstanding (DIO)?
It is the average number of days inventory sits before it sells: 365 divided by the turnover ratio. A 5.0x ratio is about 73 days.
04
Should I use retail price or cost?
Use cost figures (COGS and inventory value at cost). Mixing retail price with cost distorts the ratio.