Inventory Turnover and Days Calculator

Formulas

The formulas used in the calculations are:

$\text{Average Inventory} = \frac{\text{Beginning Inventory} + \text{Ending Inventory}}{2}$

$\text{Inventory Turnover} = \frac{\text{COGS}}{\text{Average Inventory}}$

$\text{Inventory Days} = \frac{365}{\text{Inventory Turnover}}$

Description

This calculator computes the Inventory Turnover and Inventory Days based on the input values of beginning inventory, ending inventory, and cost of goods sold (COGS). Inventory Turnover measures how efficiently a company manages its inventory, while Inventory Days indicates the average time it takes to sell the inventory.

Example Calculation

Let's assume the following:

Beginning Inventory: $100,000
Ending Inventory: $150,000
Cost of Goods Sold (COGS): $600,000

Calculate the average inventory:

$\text{Average Inventory} = \frac{100,000 + 150,000}{2} = 125,000$

Calculate the inventory turnover:

$\text{Inventory Turnover} = \frac{600,000}{125,000} = 4.8$

Calculate the inventory days:

$\text{Inventory Days} = \frac{365}{4.8} \approx 76.04 \text{ days}$

Therefore, the Inventory Turnover is 4.8, and the Inventory Days is approximately 76.04 days.