The textbook turnover ratio is easy: COGS divided by average inventory. But a number alone doesn't tell you whether it's good. This tool computes both turnover ratio and Days Sales of Inventory (DSI), then places your result against published ranges for retail, wholesale, manufacturing, and ecommerce.
Schematic only. Different sources publish different numbers; benchmarks show context, not a verdict.
Inventory turnover tells you how many times per year your average inventory is sold and replaced. Higher is usually better (less capital tied up, fresher stock, less obsolescence risk) but too high means you're stock-out — so the optimum is some industry-typical range, not infinity.
The hard part of turnover analysis is knowing what "good" looks like. A 6× turnover is excellent in industrial equipment and disastrous in fresh grocery. This tool gives you both numbers and a benchmark to compare against.
Important caveat on benchmarks. The ranges below come from public financial datasets (mostly aggregated SEC filings, RSMeans, and trade-association reports). They are approximate. Within any single industry, business models vary enough that two competitors in the same NAICS code can have very different turn rates. Use benchmarks for context, not as a pass/fail.
If your turnover ratio is inside the typical range for your industry, you are doing roughly what others do. If it's substantially above, you are either very efficient (good) or running too thin (risk of stockout — check Stockout Risk). If it's below, you have a working capital lock-up problem and probably dead stock too — run Dead Stock Identifier.
A: No. There's a minimum consistent with acceptable stockout rate, and above that you're throwing away the safety-stock buffer that was preventing stockouts. The "best" turnover is industry-typical, often with a small buffer for your specific demand variance.
A: Yes, but only if your inventory is stable through the year. If you build inventory for a season and run it down, use the average; otherwise you'll overstate turnover in slow months and understate it in peak months.