Free calculator · Retail, grocery and restaurants
Enter the cost of the goods you sold in a period and the value of your stock at the start and end of it. See how many times your stock turned over and how many days of stock you hold.
Average stock = (opening stock + closing stock) ÷ 2.
Inventory turnover = cost of goods sold ÷ average stock.
Days of stock on hand = days in the period ÷ inventory turnover.
A shop sold goods that cost ₹24,00,000 in a year. Stock was worth ₹3,50,000 at the start and ₹2,50,000 at the end, so average stock was ₹3,00,000. Turnover is ₹24,00,000 ÷ ₹3,00,000 = 8 times a year, about 46 days of stock on hand.
Usually it means stock is not sitting idle, but very high turnover with frequent stockouts means you are losing sales. Compare turnover with your stockout and availability numbers.
Stock is valued at cost, so dividing by sales at selling price would overstate turnover. Use the same basis for both numbers.
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You do not need fifty reports to run a small business well. These ten numbers, each with a formula and a worked example from one shop's month, tell you whether you are making money, where it is stuck and what to do next.
When billing and stock share one product list, every bill updates the shelf count and every delivery, return and count corrects it. Here is how the link works, traced through one item's week.
A practical walk-through of the inventory turnover calculation: where each number comes from, how to handle seasonal stock, how monthly and yearly figures differ, and how to work it out by category.
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