Planning worked example

Inventory Turns with annual cost of goods sold of 900,000 $: a worked example

Here is what the math looks like when conditions slip. We hold every other input steady and drop annual cost of goods sold to 900,000 $, then walk the calculation through step by step. Calculate inventory turnover and days inventory on hand from COGS and average inventory.

The inputs for this scenario

  • Annual cost of goods sold: 900,000 $ (the input this scenario stresses; the baseline uses 1,800,000)
  • Beginning inventory: 320,000 $ (held at the documented default)
  • Ending inventory: 280,000 $ (held at the documented default)
  • Days in period: 365 days (held at the documented default)

Working through the calculation

  • The calculation starts from the formula this tool documents: Average inventory = (beginning + ending inventory) รท 2.
  • Inventory turns works out to 3 turns / yr at these inputs, and this is the headline figure for the scenario.
  • Days inventory works out to 122 days at these inputs.
  • Average inventory works out to 300,000 $ at these inputs.
  • COGS per day works out to 2,466 $ / day at these inputs.

How this compares with the baseline

  • Against the tool's baseline example, where annual cost of goods sold sits at 1,800,000 $ and the headline result is 6 turns / yr, this scenario comes in 50% below the baseline at 3 turns / yr.
  • The practical read: the gap between this scenario and the baseline is entirely attributable to annual cost of goods sold, so recovering it is worth quantifying in dollars before considering equipment or staffing changes. A two-point average of beginning and ending inventory can mask seasonal swings; for spiky demand use a monthly average instead of just two snapshots.

Results at a glance

  • Inventory turns: 3 turns / yr (headline result)
  • Days inventory: 122 days
  • Average inventory: 300,000 $
  • COGS per day: 2,466 $ / day

Run it with your numbers

  • To rerun this with your own numbers, open the live Inventory Turns calculator, set annual cost of goods sold to your actual value, and adjust the remaining inputs to match your operation.

Last reviewed 2026-05-12.