{"id":1573,"date":"2026-02-24T22:03:34","date_gmt":"2026-02-25T04:03:34","guid":{"rendered":"https:\/\/www.zoomshift.com\/blog\/?p=1573"},"modified":"2026-03-29T06:30:07","modified_gmt":"2026-03-29T11:30:07","slug":"inventory-turnover-ratio","status":"publish","type":"post","link":"https:\/\/www.zoomshift.com\/blog\/inventory-turnover-ratio\/","title":{"rendered":"Inventory Turnover Ratio"},"content":{"rendered":"<h2><span class=\"ez-toc-section\" id=\"what-is-the-definition-of-inventory-turnover-ratio\"><\/span>What Is the Definition of Inventory Turnover Ratio?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Inventory turnover ratio is commonly used to calculate how much inventory a business has sold and then replaced. This is specified over a certain amount of time. In order to calculate your inventory turnover ratio, you&#8217;ll first need to calculate your average inventory.<\/p>\n<p>Inventory turnover ratio is often used in the restaurant and retail industries.<\/p>\n<p>You can see how to calculate both your average inventory and inventory turnover ratio below.<\/p>\n<p>&nbsp;<\/p>\n<h2><span class=\"ez-toc-section\" id=\"how-do-you-calculate-inventory-turnover-ratio\"><\/span>How Do You Calculate Inventory Turnover Ratio?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Here\u2019s a quick way to calculate your inventory turnover ratio:<\/p>\n<p><strong>Inventory Turnover = Sales \/ Average Inventory<\/strong><\/p>\n<p>This is how to calculate your average inventory:<\/p>\n<p><strong>Average Inventory = (Beginning Inventory + Ending Inventory ) \/ 2 <\/strong><\/p>\n<p>So, what you have to do to calculate your inventory turnover ratio is:<\/p>\n<ul>\n<li>Use the above formula calculate your average inventory (divide the sum of the beginning inventory and the ending inventory by 2)<\/li>\n<li>Divide sales by average inventory<\/li>\n<\/ul>\n<p>It&#8217;s as simple as that.<\/p>\n<p>&nbsp;<\/p>\n<h2><span class=\"ez-toc-section\" id=\"what-is-a-good-inventory-turnover-ratio-for-retail\"><\/span>What Is a Good Inventory Turnover Ratio for Retail?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Having a good inventory turnover ratio helps a business manage waste and spillage. You don&#8217;t want to incur unnecessary costs, and you don&#8217;t want products or produce in your inventory that you\u2019re unlikely to sell.<\/p>\n<p>But what makes a good inventory turnover ratio?<\/p>\n<p>It&#8217;s generally considered that a good inventory turnover ratio for retail is between 2 and 4. That said, you need to make sure that the number is right for your business \u2013 a ratio above 4 might not be great as it could suggest that your purchasing levels are too low.<\/p>\n<p>******<\/p>\n<p><em>See our full list of over 50 Small Business Terms <a href=\"https:\/\/www.zoomshift.com\/blog\/small-business-glossary\/\" target=\"_blank\" rel=\"noopener noreferrer\">here<\/a>.\u00a0<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"<p>What Is the Definition of Inventory Turnover Ratio? Inventory turnover ratio is commonly used to calculate how much inventory a business has sold and then replaced. This is specified over a certain amount of time. In order to calculate your inventory turnover ratio, you&#8217;ll first need to calculate your average inventory. Inventory turnover ratio is [&hellip;]<\/p>\n","protected":false},"author":17,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"om_disable_all_campaigns":false},"categories":[11],"tags":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v19.10 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Inventory Turnover Ratio<\/title>\n<meta name=\"description\" content=\"Inventory turnover ratio is commonly used to calculate how much inventory a business has sold and then replaced.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.zoomshift.com\/blog\/inventory-turnover-ratio\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Inventory Turnover Ratio\" \/>\n<meta property=\"og:description\" content=\"Inventory turnover ratio is commonly used to calculate how much inventory a business has sold and then replaced.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.zoomshift.com\/blog\/inventory-turnover-ratio\/\" \/>\n<meta property=\"og:site_name\" content=\"Zoomshift\" \/>\n<meta property=\"article:published_time\" content=\"2026-02-25T04:03:34+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2026-03-29T11:30:07+00:00\" \/>\n<meta name=\"author\" content=\"ZoomShift\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"ZoomShift\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"2 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.zoomshift.com\/blog\/inventory-turnover-ratio\/\",\"url\":\"https:\/\/www.zoomshift.com\/blog\/inventory-turnover-ratio\/\",\"name\":\"Inventory Turnover Ratio\",\"isPartOf\":{\"@id\":\"https:\/\/www.zoomshift.com\/blog\/#website\"},\"datePublished\":\"2026-02-25T04:03:34+00:00\",\"dateModified\":\"2026-03-29T11:30:07+00:00\",\"author\":{\"@id\":\"https:\/\/www.zoomshift.com\/blog\/#\/schema\/person\/9ba35c556ffdf9d8dab06992b17a4b0d\"},\"description\":\"Inventory turnover ratio is commonly used to calculate how much inventory a business has sold and then replaced.\",\"breadcrumb\":{\"@id\":\"https:\/\/www.zoomshift.com\/blog\/inventory-turnover-ratio\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/www.zoomshift.com\/blog\/inventory-turnover-ratio\/\"]}]},{\"@type\":\"BreadcrumbList\",\"@id\":\"https:\/\/www.zoomshift.com\/blog\/inventory-turnover-ratio\/#breadcrumb\",\"itemListElement\":[{\"@type\":\"ListItem\",\"position\":1,\"name\":\"Home\",\"item\":\"https:\/\/www.zoomshift.com\/blog\/\"},{\"@type\":\"ListItem\",\"position\":2,\"name\":\"Inventory Turnover Ratio\"}]},{\"@type\":\"WebSite\",\"@id\":\"https:\/\/www.zoomshift.com\/blog\/#website\",\"url\":\"https:\/\/www.zoomshift.com\/blog\/\",\"name\":\"Zoomshift\",\"description\":\"SMB Management Blog\",\"potentialAction\":[{\"@type\":\"SearchAction\",\"target\":{\"@type\":\"EntryPoint\",\"urlTemplate\":\"https:\/\/www.zoomshift.com\/blog\/?s={search_term_string}\"},\"query-input\":\"required name=search_term_string\"}],\"inLanguage\":\"en-US\"},{\"@type\":\"Person\",\"@id\":\"https:\/\/www.zoomshift.com\/blog\/#\/schema\/person\/9ba35c556ffdf9d8dab06992b17a4b0d\",\"name\":\"ZoomShift\",\"image\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/www.zoomshift.com\/blog\/#\/schema\/person\/image\/\",\"url\":\"https:\/\/secure.gravatar.com\/avatar\/05af010fb3485fa8095793cfff89a5e6?s=96&d=mm&r=g\",\"contentUrl\":\"https:\/\/secure.gravatar.com\/avatar\/05af010fb3485fa8095793cfff89a5e6?s=96&d=mm&r=g\",\"caption\":\"ZoomShift\"},\"description\":\"The leading scheduling software designed for hourly employees. 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