Inventory turnover compares the cost of goods sold with average inventory value. Using sales revenue in the numerator and stock purchase cost in the denominator mixes two different bases. The Inventory Turnover Calculator keeps the comparison on an entered cost basis for a stated period.
Take opening and closing stock values
Enter opening inventory PKR 50,000 and closing inventory PKR 30,000. The simple average is PKR 40,000. Enter cost of goods sold PKR 60,000 over 90 days.
Turnover is 1.5 times for that 90 day period: PKR 60,000 divided by PKR 40,000. Estimated inventory days are 60 because 90 days divided by 1.5 gives 60. These are period measures based on the supplied opening and closing balances.
The result is not automatically an annual ratio
A turnover of 1.5 over 90 days should not be labelled 1.5 per year. Changing the period changes what the ratio describes. Keep the day count with the output when comparing results across months, quarters or trading seasons.
Use comparable valuation rules for opening stock, closing stock and the cost of goods sold. Retail asking prices are not interchangeable with product cost. Landed Cost per Usable Unit Calculator can help establish an entered usable unit cost for a particular shipment.
Two balances can miss movement within the period
The opening and closing average is deliberately simple. Large purchases or seasonal peaks between those dates may make it a weak description of the stock carried through the whole period. If that matters, review more frequent inventory records outside this two balance model.
Product mix can also hide slow items. A combined store ratio may improve while one SKU stays unsold. Consider separate calculations for materially different groups, using matching costs and periods.
No sales cost means no finite days estimate
With zero cost of goods sold, there is no positive turnover to divide the period by. Inventory days are undefined rather than zero days. That result says the entered period has no goods sold cost; it does not prove the inventory disappeared.
Turnover measures historical movement under the inputs, not the date of your next stockout. Stock Runway Calculator uses available units and daily demand for forward coverage, while Reorder Point & Quantity Calculator adds supplier lead time and a safety buffer. Keep physical stock counts and value records reconciled before using any of these results to guide a purchase.