How fast is your stock really moving?
Inventory turnover measures how many times you sell and replace your stock over a period, usually a year. It is one of the clearest signals of how efficiently a product business runs, because stock is cash sitting on a shelf — the faster it turns, the less money is tied up and the lower your risk of holding items that go stale, out of fashion or out of date. This calculator gives you the turnover ratio and the equally useful days-sales-of-inventory figure.
The turnover ratio is cost of goods sold divided by your average inventory value for the period. A ratio of 6 means you sold through your average stock six times in the year. Dividing 365 by that ratio gives days sales of inventory — roughly how many days a typical item sits before it sells. At a turnover of 6, that is about 61 days on the shelf. Enter your COGS and average stock and the tool returns both instantly.
There is no universal right number — a grocer turns stock far faster than a furniture shop — so the real value is comparing your ratio against your own history and your industry. A falling ratio can mean overbuying, weakening demand or ageing stock; a very high ratio can mean you are selling fast but risking stockouts and lost sales. The goal is a balance that keeps shelves stocked without freezing cash.
Improving turnover usually means buying to demand, clearing slow movers, and watching your best and worst sellers closely. Tallium tracks stock levels, cost of goods sold and product performance as you trade, so your turnover and days-on-hand are always current and you can spot dead stock before it ties up too much cash.
Frequently asked questions
Stop juggling spreadsheets. Tallium runs invoicing, VAT & corporate tax, POS and inventory in one simple app.
Try Tallium free