For an inventory calculation formula example, the current inventory balance is 30,000 units and the prior inventory balance is 20,000. The total inventory is 30,000 plus 20,000, or 50,000.

How To Calculate Inventory Turnover: Example An example will help show how the inventory ratio is calculated. Take XYZ fictional company with $500,000 in COGS and $100,000 in average inventory.

For example, retail organizations report high inventory turnover rates because they operate in a high-volume and low-margin industry. On the other hand, low volume industries such as airline ...