Free tool
Inventory to sales ratio calculator
Is your inventory growing faster than your sales? Compare stock value to monthly sales and see how many months of stock you're carrying.
The formula
Example: $42,000 of inventory at cost against $14,000 of monthly COGS is a ratio of 3.0, about three months of stock. If your suppliers deliver in three weeks, that's likely more than you need. Find which products are holding the extra with the sell-through calculator.
FAQ
What is a good inventory to sales ratio?
Lower generally means stock is moving relative to sales. Track the trend month to month; a rising ratio means inventory is growing faster than sales.
Should I use cost or retail value?
Use the same basis for both: inventory at cost against sales at cost (COGS), or both at retail. Mixing them distorts the ratio.
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