#695 · Business Tool

Small Business Inventory Calculator

Use this Small Business Inventory Calculator to analyze inventory turnover, days of inventory on hand, reorder point, and inventory health. It helps identify whether cash is tied up in stock or whether you risk running out.

Calculator

Inventory inputs
$
$
$
units/day
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How to use this calculator

Enter beginning inventory, ending inventory, cost of goods sold, and average daily sales units. The calculator estimates turnover, inventory days, and a simple reorder point using a 7-day default lead time.

What the result means

Higher turnover usually means inventory is moving efficiently. Very low turnover may indicate overstocking, slow-moving products, or cash trapped in inventory.

Average Inventory = (Beginning + Ending) / 2. Inventory Turnover = COGS / Average Inventory. Inventory Days = 365 / Turnover. Reorder Point = Daily Sales x 7.

Actual reorder points should include supplier lead time, safety stock, and seasonal demand.

Example calculation

If beginning inventory is $20,000, ending inventory is $25,000, and COGS is $90,000, average inventory is $22,500 and turnover is 4.0 times.

Tips for better results

  • Review slow-moving SKUs monthly.
  • Set reorder points for best-selling items.
  • Avoid buying inventory only because suppliers offer discounts.

FAQ

How much inventory should a small retail store keep?

A small retail store should keep enough inventory to meet expected demand through the next supplier lead time plus safety stock, without tying up too much cash.

What is a good inventory turnover for a small business?

Many small businesses aim for turnover above 5 times per year, but the right level depends on product category, seasonality, and supplier lead times.

When should I reorder inventory?

Reorder when available stock approaches your reorder point, which is usually daily sales multiplied by supplier lead time plus safety stock.

How many days of inventory should I have on hand?

Many businesses target 30 to 60 days of inventory, but fast-moving products may need less and seasonal products may need more.

How do I avoid overstocking inventory?

Use sales history, reorder points, minimum order quantities, and slow-moving inventory reports before purchasing additional stock.

Inventory metrics

MetricMeaning
TurnoverHow many times inventory sells through
Inventory DaysDays inventory stays on hand
Reorder PointEstimated restock trigger
RiskOverstock or stockout signal

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