KKPI Formulas
Accounting KPI Formula

Inventory Turnover Formula

Inventory turnover measures how many times inventory is sold and replaced during a period.

Use the calculator Browse Accounting KPIs
Affiliate resources

Ideas for You

Useful learning resources related to this page. As an Amazon Associate, this site may earn from qualifying purchases at no extra cost to you.

Inventory Turnover books Books that help you understand Inventory Turnover and related business metrics more deeply. Explore resources → Inventory Turnover audiobooks Audiobook searches for learning Inventory Turnover while commuting, walking, or working. Explore resources → Accounting Excel resources Excel-focused resources for building KPI trackers and dashboard workflows. Explore resources → Financial statement analysis Practical resources for turning Inventory Turnover into reports, dashboards, and business decisions. Explore resources →

Simple formula

Cost of Goods Sold / Average Inventory

The formula uses these inputs:

  • Cost of Goods Sold: enter your value in the calculator or spreadsheet.
  • Average Inventory: enter your value in the calculator or spreadsheet.

Excel formula

Use this Excel formula as a starting point. Replace the sample cell references with the cells in your worksheet.

=IFERROR(B2/C2,0)

Google Sheets formula

In most cases, the Google Sheets version uses the same structure as Excel.

=IFERROR(B2/C2,0)

Power BI DAX measure

Use this DAX pattern as a starting point and rename measures or columns to match your Power BI model.

Inventory Turnover =
DIVIDE(
    [Cost of Goods Sold],
    [Average Inventory]
)

SQL example

This generic SQL pattern can be adapted to your warehouse table names and column names.

SELECT
    /* replace with your formula */ AS inventory_turnover
FROM kpi_data;

Inventory Turnover calculator

Result—

How to interpret Inventory Turnover

Use this KPI with trend data, targets, and related metrics. A single value is less useful than a consistent definition tracked over time.

Important: KPI definitions can vary by company, accounting policy, analytics platform, or reporting standard. Keep the definition consistent when comparing periods.

Common mistakes

  • Mixing different time periods in the numerator and denominator.
  • Using totals that do not match the KPI definition used by your company.
  • Comparing results across teams or industries without context.

Related KPI formulas

Frequently asked questions

What is the Inventory Turnover formula?

The common Inventory Turnover formula is: Cost of Goods Sold / Average Inventory.

How do you calculate Inventory Turnover in Excel?

Use this Excel formula pattern: =IFERROR(B2/C2,0). Replace the cell references with your own data.

Can this KPI be calculated in Power BI?

Yes. Use the DAX measure on this page as a starting point and adjust table and column names to match your model.