Inventory-to-Sales Ratio Calculator

The inventory-to-sales ratio compares the value of the stock you hold with the sales it supports. Retailers and distributors use it to check whether stock levels are keeping pace with revenue.

Enter your average inventory value (for example the mean of month-end values) and net sales for the same period. Use the same currency and the same period for both.

Compare the result with your own history and your sector, not with other industries: grocery runs far leaner than furniture or spare parts.

How the calculation works

Inventory-to-sales ratio = average inventory value ÷ net sales.

Example: €150,000 average inventory and €900,000 net sales gives 150,000 ÷ 900,000 = 0.17, meaning about 17 cents of stock for every euro of sales.

Because sales include your margin while inventory is valued at cost, this ratio is not the inverse of turnover. Use the inventory turnover calculator if you need the cost-based view.

See also: Inventory turnover calculator, Stock Cover Calculator.