Free · Business valuation and cash flow

Ending Inventory & Average-Stock Turnover

Reconcile opening inventory, net purchases and cost of goods sold, then calculate turnover using the average of opening and ending inventory.

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Calculator inputs

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How to use this calculator

  1. Enter the known values in the units shown. Results update as you type.
  2. Where results are editable, change one to solve backwards. Lock a value to hold it fixed.
  3. Use the worked example to check the method. Reset restores the starting fields.

Use the result with context

Results are estimates for planning and education. Confirm rates, taxes, fees, and legal requirements with the relevant institution or a qualified professional before making a financial decision.

Formula and method

Opening inventory of 100 plus net purchases of 500 less cost of goods sold of 400 leaves 200. Turnover is 400 ÷ 150, or about 2.6667.

Ending inventory = beginning inventory + net purchases − COGS; turnover = COGS ÷ ((beginning + ending inventory) ÷ 2)

Worked example

Enter these known values and leave the other values blank.

Is cost of goods sold available?
Yes
Beginning inventory value
100 USD
Net inventory purchases
500 USD
Cost of goods sold
400 USD
Ending inventory value
200 USD
Inventory turnover for the period
2.6667

Assumptions and limitations

  • Inventory values and COGS must use the same accounting basis, period, currency and scale.
  • Opening and ending inventory, net purchases and COGS must be nonnegative in this model. Enter separately adjusted values if returns or write-downs require additional accounting.
  • The simple inventory identity excludes separate adjustments unless they are already included consistently in the entered values.
  • Turnover uses only opening and ending balances. A zero average inventory makes turnover undefined; seasonal stock levels may require a more representative average.

Common questions

Does this tool choose an inventory costing method?

No. Determine the entered inventory and COGS values using the accounting method that applies to your records.

Is turnover annual?

Only if the entered COGS covers a year. Otherwise it is turnover for the entered reporting period.

References

Inventory balances cannot be negative in this model, and average inventory must be positive to define turnover.

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