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How to calculate inventory turnover in Excel and Google Sheets
Excel & Google Sheets
=B2/B3✓
Verified example
Computed by a real spreadsheet engine on the sample data below.
| Metric | Value |
| Cost of Goods Sold | 50000 |
| Average Inventory | 10000 |
| Inventory Turnover |
=B2/B3→5
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Step by step
- 1Enter your Cost of Goods Sold (COGS) in cell B2.
- 2Enter your Average Inventory in cell B3.
- 3In cell B4, use the formula =B2/B3 to calculate the inventory turnover.
Tips
- Ensure your COGS and Average Inventory figures are accurate to get reliable results.
- If you're using different locales, be mindful of date formats and decimal separators.
- Consider using named ranges for better readability and easier updates.
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Frequently asked
What does a high inventory turnover ratio indicate?
A high inventory turnover ratio indicates that a company is selling its inventory quickly.
Can I calculate average inventory directly in the formula?
Yes, by averaging beginning and ending inventory values within the formula.
Is inventory turnover the same as stock turnover?
Yes, they refer to the same financial metric.