Inventory Turnover Calculator

Inventory turnover measures how many times a business’s inventory is sold and replaced in one period, usually one year. A turnover of 4.0× means the entire average inventory value cycles about 4 times in that period.

The formula: inventory turnover = COGS ÷ average inventory, with average inventory = (beginning inventory + ending inventory) ÷ 2. Example: COGS Rp600,000, beginning inventory Rp150,000, ending inventory Rp250,000 → average Rp200,000 → turnover 3.0×.

This calculator uses COGS as the numerator because inventory is valued at its acquisition cost, not its selling price — both are on the same valuation basis, keeping the comparison consistent. There is another convention using sales as the numerator (common in retail analysis, e.g. in GMROI calculations); both are valid as long as they are used consistently and not mixed across periods.

DIO (days inventory outstanding) expresses turnover in days: DIO = 365 ÷ inventory turnover. A turnover of 3.0× equals a DIO of 121.67 days — meaning on average each rupiah of inventory sits about 121.67 days before being sold.

Inventory turnover measures the speed of inventory rotation, while GMROI (gross margin return on investment) measures gross profit return per rupiah of inventory cost: GMROI = gross margin ÷ average inventory cost. Both use inventory data but answer different questions. For inventory profitability analysis, see the GMROI calculator.

This tool focuses on the turnover ratio (how many times), with DIO only as a derived output. The DIO calculator is a separate tool fully focused on the days metric: target-DIO solver to maximum inventory, inventory-reduction simulator, and per-sector DIO benchmark tables.

An average of two points (beginning and end) is a simplification — for seasonal businesses, a monthly average gives a more accurate picture. This ratio does not distinguish obsolete or damaged inventory from healthy stock, and what counts as "reasonable" varies widely across sectors, so cross-sector comparisons can mislead. This calculator’s results are general education, not professional financial advice.