Free Tool

Free Inventory Turnover Calculator

Calculate your inventory turnover ratio — also called the stock turnover ratio — instantly. Enter your cost of goods sold and average inventory value to see how efficiently your Shopify store is moving stock — free, no signup required.

How to Calculate Inventory Turnover

Enter cost of goods sold and average inventory value for the same period. Select annual, quarterly or monthly. Turnover is cost of goods sold divided by average inventory value. Days on hand is the number of days in the selected period divided by turnover.

Cost of Goods Sold ($)

Average Inventory Value ($)

Period

What Is Inventory Turnover?

Inventory turnover — also known as the stock turnover ratio — measures how many times a business sells and replaces its stock over a given period. A high ratio means fast-moving stock and efficient cash flow; a low ratio signals overstock or slow sales.

Measure	Calculation	Result
Inventory turnover	$120k cost of goods sold divided by $30k average inventory	4 times
Days on hand for the annual example	365 days divided by 4	About 91 days

Compare Turnover Across Your Own Periods

Compare the same products across similar periods in your store. Use inventory values measured on the same cost basis each time. Look at stockouts, promotions and changes in your product mix alongside the ratio. This page does not establish a category or ecommerce average.

How Forthcast Improves Your Inventory Turnover

Forthcast uses AI demand forecasting to help Shopify merchants order the right quantity at the right time — reducing both stockouts and overstock. Better forecasts mean higher turnover without sacrificing service levels.

Turn your turnover targets into automatic reorders.

Forthcast predicts demand up to 12 months ahead and turns it into purchase-order suggestions tied to your actual turnover goals — for every SKU in your Shopify store.

Start your free 14-day trial →

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Frequently Asked Questions

What is a good inventory turnover ratio?

There is no single target for every store. Compare your result with earlier periods for the same product group and cost basis. A higher ratio can mean stock is moving faster, but check whether stockouts or a change in your range affected it. This calculator gives a ratio and days on hand. It does not rank your store against an industry average.

How do I calculate average inventory?

Average inventory = (Beginning inventory + Ending inventory) / 2. For a more accurate figure, average the inventory balance at the end of each month over the period you're measuring. Forthcast tracks this automatically from your Shopify data.

Should I use COGS or net sales for inventory turnover?

Use cost of goods sold because both it and inventory value are measured on a cost basis. Net sales includes markup and would change the ratio. Use the same method when comparing your own periods.

Is this inventory turnover calculator free?

Yes. The inventory turnover calculator on Forthcast is completely free — no signup required, no data stored.