Inventory Period Calculator

Inventory Period = 365 × Average Inventory / Annual Cost of Goods Sold

The inventory period also can be calculated as 365 divided by inventory turnover:-

Inventory Period = 365 / Inventory Turnover

A firm’s annual report shows the beginning inventory as $500,000 while its ending inventory is $550,000. Now, divide the sum of $1,050,000 by two to get the average inventory of $525,000 for the year.

The inventory turnover for the year equals ($5,000,000) / ($525,000) i.e. 9.5

Therefore, Inventory Period is:-

• = 365 days / 9.5 = 38 days