An inventory turnover is a ratio is that shows the number of times inventory is sold in a given time. The inventory turnover ratio tells how much time taken by a company to sold its inventory in a year, and how many days taken by a company to sell its average amount of inventory.
Inventory is a raw material used in production, products beneath the manufacturing process, and finished products that are ready for selling. It means that all the material which is used in the development of the product all is inventory.
The Formula for calculating inventory turnover ratio, inventory average, and inventory days is as follows:
Calculate, Average Inventory = (Begining Inventory + Ending Inventory) / 2
Inventory Turnover Ratio = Cost of Goods Sold / Average Inventory
and Inventory Days = Period / Inventory Turnover Ratio
Where Period is commonly taken 365 days for finance year and 90 days for quarterly calculations.
What can you do with Inventory Turnover Calculator?
- It helps to calculate inventory turnover ratio and inventory days and helps to measure your company's growth.
- Users can see the accurate value of the inventory turnover ratio, average inventory and inventory days. And also can see the inventory turnover ratio in words.
- This calculator helps to share your calculations by URL.