Inventory Calculator
Calculate COGS, turnover, and days in inventory to optimize stock and profitability.
Why Inventory Management Matters
Inventory management is critical for retail, e-commerce, manufacturing, and any business that holds stock. Poor inventory control leads to overstocking, waste, or stockouts. This calculator helps you measure efficiency and profitability.
How to Use This Calculator
- Beginning Inventory: Value at start of period (month/quarter).
- Purchases: All inventory bought during the period.
- Ending Inventory: Value left at end of period.
- Sales: Total revenue from sold goods.
- Click “Calculate” to see key metrics like COGS, turnover, and margin.
Formulas Used
COGS = Beginning + Purchases − Ending InventoryInventory Turnover = COGS ÷ Average InventoryDays in Inventory = 365 ÷ TurnoverGross Margin = (Sales − COGS) ÷ Sales × 100Real-World Example
Beginning: $25,000
Purchases: $60,000
Ending: $15,000
Sales: $100,000
COGS = 25k + 60k − 15k = $70,000
Turnover = 70k / ((25k + 15k)/2) = 3.5x/year
Days in Inventory = 365 / 3.5 ≈ 104 days
What Your Turnover Tells You
| Turnover Rate | Interpretation |
|---|---|
| 1–3x | ⚠️ Low — Risk of overstocking or slow-moving items |
| 4–12x | ✅ Healthy — Balanced inventory and demand |
| 12–20x+ | ⚠️ High — Risk of stockouts, lost sales |
Tips to Optimize Inventory
- ✅ Use ABC analysis — focus on high-value items
- ✅ Forecast demand using sales history and trends
- ✅ Set reorder points to avoid stockouts
- ✅ Negotiate better terms with suppliers for faster restocking
- ✅ Run promotions on slow-moving stock
Advanced Use: Just-in-Time (JIT)
Top companies like Toyota and Amazon use Just-in-Time inventory to minimize holding costs. This requires:
- Reliable suppliers
- Precise demand forecasting
- Efficient logistics
Use this calculator to benchmark your current turnover before adopting JIT.
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