How To Calculate Inventory Turns

Inventory Turns is the number of times your inventory turns (is used or replaced with new product) during a given period (month, year, whatever you choose).  Typically, the higher the turns the better because it indicates that product is purchased and used on an “as needed” basis and is not just sitting on the shelves.  Typical industry standards for Inventory Turns in restaurants is 4 – 8 turns a month.  The higher the ratio of fresh product to frozen/dry product you use the higher the number should be.

Inventory Turn Formula

The formula to calculate inventory turns is:
inventory used ÷ average inventory

First, calculate average inventory for the period.  If you take a monthly inventory, this is the formula to calculate average inventory for the month:
beginning inventory + ending inventory ÷ 2

Next, calculate inventory used:
= beginning inventory + purchases ending inventory

Lastly, calculate inventory turns:
inventory used ÷ average inventory


Calculate Inventory Turns Example
Beginning Inventory $3,490
Purchases $22,873
Sub-Total $26,363 BI+P
Ending Inventory $6,129
Inventory Used $20,234 ST-EI
Average Inventory $4,809  (BI + EI) ÷ 2
Inventory Turns 4.21  IU ÷ AI



Average Inventory = $4809.50 ($3490 + $6129) ÷ 2

Inventory Turns =  4.21  ($20,234 + $4809.50)

Inventory Change = +$2639 or +176%


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 CALLIE []    [ May 08, 2015 ]

Your Website is a Wonderful Teaching Tool!  I learned a lot about the complexities of running a restaurant and appreciate the work invested in this.  Thanks so much for sharing.

DAVID BUCHANAN    [ Jun 22, 2014 ]

Thanks Kiran! Pretty cool that you have set the site as your homepage!!

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may i say this is an amazing website. I have made it my homepage, and make it a point to read at least an article everyday. Thank you so very much for all the hard work you have put in , so newcomers like me can gain from the knowledge you have acquired.

DAVID BUCHANAN    [ May 28, 2014 ]

Jeremy – Awesome! It’s nice to know people find the info here useful. Next time you come into Blackfish say “hi”. I’m usually there everyday except mon/tue.

JEREMY T []    [ May 26, 2014 ]

I agree with Mike. I have been turning to this site for years now to learn  and apply to my establishment. As a Chef it is hard to find the time to do all of these worksheets myself. This site has been invaluable to me! Also, I would like to add that I love eating at the Blackfish. I have had everything on the menu and it is all fantastic.

Nice work and thank you very much.

DAVID BUCHANAN    [ May 25, 2014 ]

Michael – Thanks so much for the feedback! It is a lot of work…so hearing that folks are returning on a regular basis is very gratifying.

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