How to calculate Inventory Turnover

Formula

Inventory turnover = cost of goods sold ÷ average inventory value

SQL query

This example assumes: inventory_snapshots(as_of, value), sales(sold_at, cogs). It is written in PostgreSQL syntax; date functions differ slightly in MySQL, BigQuery and SQLite, and your column names will differ from these.

WITH avg_inv AS (
  SELECT AVG(value) AS avg_value
  FROM inventory_snapshots
  WHERE as_of >= DATE '2026-01-01' AND as_of <= DATE '2026-12-31'
), c AS (
  SELECT SUM(cogs) AS cogs FROM sales
  WHERE sold_at >= DATE '2026-01-01' AND sold_at <= DATE '2026-12-31'
)
SELECT c.cogs / NULLIF(avg_inv.avg_value, 0) AS turnover
FROM c, avg_inv;

Common mistakes that make Inventory Turnover wrong

• Use cost, not selling price, for the numerator, or turnover is overstated.
• Averaging only the start and end balances misses seasonal peaks.
• Slow and fast products behave differently; compute by category too.

Ask for Inventory Turnover in plain English

Instead of writing the query yourself, you can type the question. SchemaChat turns it into SQL against your connected database or uploaded file, runs it, and shows the SQL and the figures it used so you can check the answer before you share it. It does not replace your judgement about the definition: check that the query matches the formula your business uses.

• What is our inventory turnover by product category?
• Which categories turn slowest?