Measure how many times you sell through your stock in a period, and how many days it sits.
Your numbers
$
$
(Starting inventory + ending inventory) / 2.
Inventory turnover
0.0×
times per period
Days inventory on hand0 days
Reads as\u2014
What inventory turnover means
Inventory turnover is how many times you sell and replace your stock in a period. It equals your cost of goods sold divided by your average inventory at cost. Higher turnover means your cash is not tied up in stock sitting on shelves.
Days inventory on hand converts that into a plain number: how many days, on average, a unit sits before selling. What counts as good varies by category, but low turnover ties up cash and risks dead stock, while very high turnover can mean you are stocking out. Aim for the healthy middle for your niche.
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