Inventory turns calculator
Intro: Inventory turns (the inventory turnover ratio) tell you how many times you use up and replace your inventory in a year. Enter your cost of goods sold and your inventory value below to see your turns and how many days of inventory you're holding.
This calculator runs in your browser. Nothing you type is sent anywhere.
How inventory turns are calculated
Average inventory = (beginning inventory + ending inventory) ÷ 2
Inventory turns = annual COGS ÷ average inventory
Days of inventory = 365 ÷ inventory turns
Higher turns mean inventory moves faster and less cash sits on the shelf. Lower turns mean you're holding more stock for each dollar you use.
Worked example (Example data)
A job shop's numbers for one year:
| Value | |
|---|---|
| Cost of goods sold | $1,800,000 |
| Beginning inventory | $420,000 |
| Ending inventory | $380,000 |
- Average inventory = ($420,000 + $380,000) ÷ 2 = $400,000
- Inventory turns = $1,800,000 ÷ $400,000 = 4.5 turns per year
- Days of inventory = 365 ÷ 4.5 = about 81 days
Example data, not from a real shop.
In plain terms: this shop is holding a little under three months of inventory at any time.
Inventory turns at a job shop: raw, WIP and finished goods
A single turns number for the whole shop hides a lot. At a job shop, inventory usually sits in three places, and each one tells you something different:
- Raw material: bar stock, sheet, castings, hardware. Low turns here often mean buying in big lots for price breaks, or leftover stock from jobs that changed.
- Work in process (WIP): material already released to the floor, with labor in it. Low WIP turns usually mean jobs are waiting: on a machine, on outside processing, on an inspection, or on a missing part.
- Finished goods: parts made and waiting to ship, often for blanket orders or kanban customers. Low turns here can mean you're building ahead of what customers are pulling.
Run the calculator once for each bucket (use the COGS that flows through it) to see where the cash is actually sitting.
Why turns matter for cash
Every dollar of inventory is a dollar you've already paid for and haven't been paid back on. In the example above, raising turns from 4.5 to 6 on the same COGS would drop average inventory from $400,000 to $300,000 (Example data). That's $100,000 that could be in the bank instead of on a rack. Turns are also an early warning: when they slide, it's usually because WIP is piling up or something is being overbought.
What's a "good" number?
It depends on what you make, how you buy and what your customers expect. A shop running high-mix, low-volume work with long-lead castings will look nothing like a shop running repeat parts from bar stock. The most useful comparison is your own shop against itself: track turns monthly or quarterly and watch the trend, by bucket.
Where to find these numbers in JobBOSS² or E2
- COGS: your income statement for the period, or a cost of goods / material usage report from your ERP.
- Inventory value: an inventory valuation report at the start and end of the period.
If you only have month-end values, average all of them rather than just the first and last for a steadier number.
Want turns, aged WIP and min/max on one screen?
The ShopPane Inventory Pack (coming soon) will read your JobBOSS² or E2 export and show inventory turns, aged WIP (jobs and material sitting too long) and items below min or above max. It uses quantities, locations, values and dates only, no part descriptions, specs or drawings, and runs in your browser like the rest of ShopPane.
Packs are $49/mo on top of the $79/mo dashboard, or $199/mo for the full suite.
Join the Inventory Pack waitlist
Built by Jay, 13 years in aerospace manufacturing (engineering, data, lean, supply chain).
FAQ
What is the inventory turnover ratio? It's how many times you use up and replace your average inventory over a year: annual cost of goods sold divided by average inventory value. "Inventory turns" is the same thing.
Should I use COGS or sales? COGS (or the cost of material used). Inventory is valued at cost, so dividing sales by it inflates the number with your margin.
How do I convert turns to days of inventory? Divide 365 by your turns. 4.5 turns is about 81 days of inventory (Example data).
Should WIP be included? For a whole-shop number, yes: raw, WIP and finished goods together. To find where cash is stuck, calculate each one separately.
I only have a quarter's numbers. Does that work? Yes. Choose "Quarter" as the period and the calculator annualizes COGS (×4). You can also enter a custom number of days.
Is my data sent anywhere? No. The calculator runs entirely in your browser. Nothing you enter is sent, stored or tracked.