Enter the cost of goods sold, beginning inventory, and ending inventory into the calculator. The calculator will evaluate and display the inventory turnover ratio.

- Asset Turnover Ratio Calculator
- Return on Assets Calculator (ROA)
- Days In Inventory Calculator
- Ending Inventory Calculator

## Inventory Turnover Ratio Formula

The following formula is used to calculate an inventory turnover ratio.

I = COGS / [(BI + EI)/2]

- Where I is the inventory turnover ratio
- COGS is the cost of goods sold
- BI is the beginning inventory
- EI is the ending inventory

## Inventory Turnover Ratio Definition

The inventory turnover ratio is a measure of how quickly a business can turn inventory into sales. The better the turnover ratio, the better the company is at converting on sales and moving inventory once it’s on the shelf.

## Inventory Turnover Ratio Example

How to calculate an inventory turnover ratio?

**First, determine the COGS.**Calculate the total cost of goods sold.

**Next, determine the beginning inventory.**Calculate the beginning inventory value.

**Next, determine the ending inventory.**Calculate the ending inventory value.

**Finally, calculate the ITR.**Calculate the inventory turnover ratio using the equation above.

## FAQ

**What is an inventory turnover ratio?**

An inventory turnover ratio is a measure of how quickly a business moves product from inventory to sales.

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