Average Inventory Calculator
The average stock level over a period.
Average inventory
$35,000
opening and closing only
For a seasonal business the two-point method can be badly misleading, since a year-end just after a sell-down understates the average and flatters every ratio built on it.
How the Average Inventory Calculator works
Average inventory is the denominator in turnover, GMROI and days-of-inventory calculations, which makes it quietly important. The two-point average of opening and closing is standard, but for a seasonal business a monthly average is considerably more honest.
Not financial advice. Marketplace fees change, and they vary by country, plan and seller status. Every rate here is an editable default, not a quoted price — check the platform's current fee schedule before you price a product against it. This is not tax or business advice.
Frequently asked questions
How is average inventory calculated?
(Beginning inventory + ending inventory) ÷ 2 for a simple average. For better accuracy, sum the month-end balances across the year and divide by twelve.
Why does the method matter?
Because it feeds every ratio built on it. A seasonal retailer whose year ends just after a peak sell-down will report an artificially low average from the two-point method, which inflates turnover and flatters GMROI.
Should I use cost or retail value?
Cost, and match it to the numerator. Inventory turnover uses cost of goods sold over average inventory at cost — mixing retail value with COGS produces a number that means nothing.
How does it affect turnover?
Inversely. A lower average inventory raises turnover, which is why the calculation method can change the headline figure substantially without anything about the business changing at all.