Formula
Turnover divides the cost of goods sold by the average inventory:
Turnover = cost of goods sold / average inventory
Days are 365 divided by that turnover when the turnover is above zero.
Assumptions
- Both amounts cover the same period.
- Average inventory is greater than zero.
Worked example
$120,000.00 of goods sold against $30,000.00 of average inventory is 4.00 times.
Input definitions
- Cost of goods sold
- The cost of what was sold in the period. Zero is allowed.
- Average inventory
- The typical inventory value for that period.
Limitations
This is a planning estimate, not payroll, tax, shipping, or marketplace advice. The currency control changes the symbol only.
Questions
Is this units or money?
Both fields are money, so the result is how many times the inventory value turned over.
Why 365 days?
The days figure assumes the amounts cover a year. Use a matching period or ignore the days row.