Turnover is measured as a ratio of Sales to Inventory over a year. A turnover of ‘1’ means that over the entire contents of inventory is sold in over the year.
DSI (days of sales inventory) is a measurement of how many days are required to turn over the entire inventory.
Turnover = Sales / Inventory
DSI = Turnover / 365
- Investopedia – Inventory Turnover – Some methods on how to calculate inventory turnover.
- Wikipedia – Inventory Turnover – Formulas on inventory turnover. Includes inventory application in business.
- Accounting Tools – Inventory turnover formula – Describes inventory turnover and includes some formulas for its calculation.
- The Balance SMB – What is inventory turnover? – An overview of how to calculate inventory turnover.
- Wikihow – How to calculate inventory turnover – How to calculate the inventory ratio.