Inventory Turnover accuracy and testing

Formula source

• Ratio = COGS / Average Inventory. Days Sales of Inventory (DSI) = 365 / Ratio.

Test cases

Known limitations

• This page documents the checked-in calculator logic and does not certify results for every real-world edge case.
• Use the result as a planning estimate unless the calculator page states a stricter purpose.

Assumptions

• This tool uses the average of beginning and ending inventory as a simple proxy for average stock held over the period.
• COGS and inventory balances should be measured for the same business unit and accounting period.
• If average inventory is zero or negative, turnover is undefined rather than infinitely efficient.
• If COGS is zero while average inventory is positive, the turnover ratio and days-to-sell result are also treated as undefined in this model.

Unit handling

• COGS (Annual) accepts values in $.
• Beginning Inventory accepts values in $.
• Ending Inventory accepts values in $.
• Days to Sell (DSI) is displayed in Days.
• Average Inventory is displayed as currency.

Rounding rules

• Number displays use up to 2 decimal places in the calculator UI.
• Currency outputs are displayed with standard US dollar formatting.

Version history

Change log