Inventory & Inventory Turnover Calculator
Analyse average inventory, inventory turnover and Days Inventory Outstanding (DIO).
Estimate the potential working-capital release from reducing inventory holding days.
1. Annual Cost and Inventory Data
2. Improvement Scenarios (Optional)
Leave either field blank if you do not want to calculate that scenario.
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Practical Example
Consider a business with the following figures:
- Annual cost of goods sold: ₹1,00,00,000
- Opening inventory: ₹10,00,000
- Closing inventory: ₹12,00,000
- Target reduction in inventory days: 5 days
Step 1: Calculate Average Inventory
(₹10,00,000 + ₹12,00,000) ÷ 2 = ₹11,00,000
Step 2: Calculate Inventory Turnover
₹1,00,00,000 ÷ ₹11,00,000 = approximately 9.09 times per year.
Step 3: Calculate Days Inventory Outstanding
(₹11,00,000 ÷ ₹1,00,00,000) × 365 = approximately 40.15 days.
Step 4: Estimate Cash Release from a Five-Day Reduction
(₹1,00,00,000 ÷ 365) × 5 = approximately ₹1,36,986.
How to Use This Calculator
- Enter annual COGS, opening inventory and closing inventory.
- Optionally enter a target reduction in inventory days or an additional target inventory reduction.
- Select Calculate to display the results.
- Select Reset to clear the inputs and results.
Note: Inventory turnover and DIO vary by industry and business model. Compare results with prior periods and relevant industry benchmarks. Estimated cash release depends on actual operational changes and should not be interpreted as guaranteed savings.