How this calculator works
Inventory turnover shows how many times you sell through your average stock in a year. Days of stock shows how long what you hold today will last at your normal pace.
The reorder line tells you the stock value at which to place the next purchase order, given your supplier’s lead time and a safety buffer.
Formula
Worked example
A shop with ₹1.8 crore annual COGS and average stock of ₹30 lakh turns its inventory 6 times a year, or every 61 days. Stock of ₹31 lakh today lasts about 63 days, while the reorder point with a 21-day lead time and 10 safety days is about ₹15.3 lakh.
Things to watch
- Calculate turnover by category. A healthy average can hide dead stock.
- Slow stock ties up cash and often ends in discounting; set an age limit for clearance.
- Shorter supplier lead times let you hold less stock with the same safety.
Questions
What is a good inventory turnover?
Grocery and FMCG often turn 10–20 times a year, apparel 3–6, and industrial parts 2–4. Compare with your category.
Why use COGS and not sales?
Stock is valued at cost, so COGS gives a like-for-like ratio.
What is safety stock?
Extra days of stock held to cover demand spikes or late deliveries.
How often should I check this?
Monthly for the business, weekly for fast-moving items.
For planning and education only, not tax, legal or investment advice. Last reviewed 2026-10-31.