Inventory metrics
Days of inventory on hand.
Enter inventory value, cost of goods sold and the number of days. See how many days of sales your stock covers, and the turnover behind it.
Days on hand = (inventory value / cost of goods sold) x days in the period.
Your numbers
Result
Worked example
Beginning inventory $60,000, ending inventory $40,000, cost of goods sold $300,000 over 365 days. Average inventory is ($60,000 + $40,000) / 2 = $50,000. Days on hand = $50,000 / $300,000 x 365 = 60.8 days. Turnover is $300,000 / $50,000 = 6.0 times, and 365 / 6 gives the same 60.8 days.
How it works
Days on hand = (value of inventory / cost of goods sold) x number of days. This is the formula Shopify gives for inventory days on hand. Use cost of goods sold, not revenue, so inventory (valued at cost) and the flow it is compared with are on the same basis.
Shopify uses a single inventory value. This calculator also lets you enter beginning inventory, in which case it uses the average of beginning and ending inventory, which smooths seasonal swings. Leave beginning inventory blank to use ending inventory alone. Pick one convention and keep it for trend comparisons.
The period only has to match your COGS figure: 365 for a year, 90 for a quarter, 30 for a month. A lower number is not automatically better, because very low days on hand can mean stockouts.
Sources (opened 2026-10-18): Inventory Days on Hand - Shopify. The formula wording above follows these pages; the example figures and all arithmetic are ours.
Inputs are user-entered figures. Results are planning estimates, not financial advice or a forecast. Everything runs in your browser. Nothing you type is sent or stored.
FAQ
How do you calculate days of inventory on hand?
Divide inventory value by cost of goods sold and multiply by the days in the period. $50,000 of average inventory against $300,000 of annual COGS is 60.8 days.
Is days of inventory on hand the same as days sales of inventory?
They describe the same idea, the number of days it takes to sell the stock. Different sources differ on whether they use ending or average inventory, so check which one a benchmark uses.
Should I use revenue or cost of goods sold?
Use cost of goods sold. Inventory is valued at cost, so dividing by sales mixes cost and selling price and understates the days.
What is a good number of days on hand?
This page does not publish benchmarks. It varies widely by product type and lead time. Compare against your own earlier periods and your supplier lead times.