Inventory Turnover – What It Means for Retailers
Inventory turnover measures how many times you sell and replace your stock in a period. Part of our inventory management guide.
Formula
Turnover = Cost of goods sold ÷ Average inventory value
Example: COGS ₹1,20,000/year, avg inventory ₹20,000. Turnover = 6. You replenish stock 6 times a year.
What’s Good?
- Retail (kirana, FMCG): 4–8x per year is typical
- Fast movers: Higher turnover
- Slow movers: Lower turnover, higher holding cost
Days of Inventory
Days of inventory = 365 ÷ Turnover.
Turnover 6 → 365 ÷ 6 ≈ 61 days. Stock lasts ~2 months on average.
How to Improve
- Reduce slow-moving items
- Negotiate better lead times
- Order smaller, more frequently for fast movers
- Clear dead stock with discounts
Use our Inventory Turnover Calculator. Stockkeeper reports show turnover by item. Join the waitlist.
Frequently Asked Questions
What is inventory turnover ratio?
Cost of goods sold ÷ Average inventory. Higher means you sell faster.
What is a good inventory turnover for kirana?
4-8 times per year is typical. Fast movers higher, slow movers lower.
How do I calculate days of inventory?
Days of inventory = 365 ÷ Turnover. Turnover 6 = ~61 days of stock.