The Inventory Period Calculator is used to calculate the inventory period.
In accounting, the inventory period is a measure of the average number of days inventory is held, calculated by dividing the inventory by the average daily cost of goods sold. It is also called days in inventory.
The inventory period calculation formula is as follows:
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
The formula for average inventory is as follows:
Average inventory = (Beginning inventory + Ending inventory) / 2