How to Calculate Stock Turn Rate

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Stock Turn Rate Calculator

Measure how efficiently your business manages its inventory

The total cost of products sold during the period.
Inventory Turnover Ratio: 0
Days to Turn (DSI): 0 Days

Understanding Stock Turn Rate

The Stock Turn Rate (also known as Inventory Turnover Ratio) is a critical efficiency metric that tells you how many times your company has sold and replaced its inventory during a specific period. A higher turn rate generally indicates strong sales and effective inventory management, while a lower rate might suggest overstocking or weak demand.

The Stock Turn Formula

Inventory Turnover Ratio = COGS / Average Inventory

To get the Average Inventory, add your beginning inventory and ending inventory for the period and divide by two.

Calculation Example

Let's say a retail business has the following figures for the year:

  • COGS: $600,000
  • Beginning Inventory: $40,000
  • Ending Inventory: $60,000

1. Average Inventory = ($40,000 + $60,000) / 2 = $50,000

2. Stock Turn Rate = $600,000 / $50,000 = 12.0

This means the business clears and replenishes its entire stock 12 times a year, or roughly once a month.

Why This Metric Matters

Turnover Type Indication
High Turnover Efficient operations, healthy sales, but potential risk of stockouts.
Low Turnover Excess stock, slow-moving items, or obsolescence risks.
function calculateStockTurn() { var cogs = parseFloat(document.getElementById('cogsValue').value); var begin = parseFloat(document.getElementById('beginInv').value); var end = parseFloat(document.getElementById('endInv').value); if (isNaN(cogs) || isNaN(begin) || isNaN(end) || cogs 10) { analysis = "Excellent! Your high turnover indicates efficient stock management and rapid sales."; } else if (turnRate >= 5) { analysis = "Good. This is a healthy turnover rate for many retail industries."; } else { analysis = "Attention: Low turnover may indicate you are carrying too much inventory relative to your sales volume."; } document.getElementById('analysisText').innerHTML = analysis; document.getElementById('stockResult').style.display = 'block'; }

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