Calculate your inventory turnover ratio, days inventory outstanding, and cash cycle efficiency — then benchmark against your Indian industry. Supports accurate multi-period trend analysis. Free, instant, runs in your browser.
Everything Indian business owners need to know about inventory turnover.
The inventory turnover ratio tells you how many times your business sold and replaced its entire inventory within a period. A ratio of 6 means you cycled through your stock 6 times in a year. Higher is generally better — it signals efficient stock management, strong sales, and less cash tied up in unsold goods. For Indian SMEs, it's one of the most important indicators of working capital efficiency.
Inventory Turnover Ratio = COGS ÷ Average Inventory
Where Average Inventory =
(Opening Stock + Closing Stock) ÷ 2
And Days Inventory Outstanding (DIO) = Number of Days in Period ÷
Inventory Turnover Ratio
Some analysts use Net Sales instead of COGS — our tool supports both modes.
Using COGS is more accurate because it eliminates the effect of your pricing strategy.
It depends on your sector. FMCG and Food & Beverage businesses often see 12–20× annually because products move fast. Apparel and fashion typically range 4–6×. Jewellery can be as low as 2–4× due to high-value slow-moving items. Electronics usually land at 6–10×. The benchmarks in this tool are calibrated for Indian market conditions. The most important thing is to track your own trend over time — improving from 4× to 6× is a win regardless of sector.
A low ratio means stock is sitting unsold for too long, which ties up working capital, increases storage costs, and risks obsolescence or spoilage. Common causes include over-purchasing, slow-moving SKUs, poor demand forecasting, or declining sales. For Indian sellers on Meesho, Amazon, or Flipkart, a low turnover can also mean you've mispriced products or the category is saturated.
Yes. An extremely high ratio — especially compared to your industry — can indicate stockouts, meaning you're frequently running out of inventory and losing potential sales. It can also mean you're buying in such small quantities that your per-unit procurement cost is too high. Balance is key: aim to maximise turnover while keeping service levels high enough to meet demand.
DIO (also called Days Sales of Inventory or DSI) measures how many days, on average, it takes to sell your inventory. DIO = Period Days ÷ Turnover Ratio. A DIO of 45 means your stock sits for 45 days before being sold. Lower DIO = faster cash conversion. DIO is a key input in the Cash Conversion Cycle (CCC = DIO + DSO − DPO), which tells you how long cash is tied up in your business operations.