# NetSuite Inventory Turnover and Days of Supply Calculator

> Source: https://netray.co/tools/netsuite-inventory-turnover-days-of-supply-calculator
> Publisher: Netray (netray.co), AI and integration engineering for ERP and manufacturing systems.
> Section: Free Tools

## Short answer

Turn annual COGS and average inventory into turns, days of supply, carrying cost and the cash tied up in excess stock.

## Category

netsuite

## Erp

Oracle NetSuite

## Audience

- Controller
- Inventory manager
- NetSuite admin

## Tool

**Kind:** calculator

**Currency:** $

**Inputs:**

#### Annual cost of goods sold

**Key:** cogs

**Type:** number

**Default:** 9600000

**Min:** 0

**Step:** 50000

**Unit:** $

**Help:** From the income statement for the last 12 months.

#### Average inventory value

**Key:** avg_inv

**Type:** number

**Default:** 2100000

**Min:** 1

**Step:** 25000

**Unit:** $

**Help:** Average of month-end inventory asset balances, not a single snapshot.

#### Annual carrying cost rate

**Key:** carry_pct

**Type:** number

**Default:** 22

**Min:** 0

**Max:** 60

**Step:** 0.5

**Unit:** %

**Help:** Capital, storage, insurance, shrink and obsolescence combined.

#### Target days of supply

**Key:** target_dio

**Type:** number

**Default:** 60

**Min:** 1

**Step:** 1

**Unit:** days

**Outputs:**

#### Inventory turns

**Key:** turns

**Expr:** cogs / avg_inv

**Format:** decimal

**Primary:** true

#### Days of supply

**Key:** dio

**Expr:** 365 / turns

**Format:** days

**Primary:** true

#### Annual carrying cost

**Key:** carry

**Expr:** avg_inv * carry_pct / 100

**Format:** currency

#### Inventory at target days

**Key:** target_inv

**Expr:** cogs / 365 * target_dio

**Format:** currency

#### Excess over target

**Key:** excess

**Expr:** max(0, avg_inv - target_inv)

**Format:** currency

#### Carrying cost saved at target

**Key:** saving

**Expr:** excess * carry_pct / 100

**Format:** currency

**Chart:**

#### Days of supply and carrying cost vs average inventory

**Type:** line

**X:** avg_inv

**From:** 500000

**To:** 4000000

**Steps:** 28

**Series:**

- dio

**Disclaimer:** Uses a 365 day year and a single blended carrying rate. Segment by item class for decisions on specific parts.

## Content

**Intro:** Turns and days of supply are the quickest read on whether inventory is working or sitting. Enter COGS and average inventory from your NetSuite financial reports and you get turns, days of supply, carrying cost and how much cash is tied up above your target.

**Sections:**

#### How to use it

**Body:** Pull trailing twelve month COGS from the income statement and month-end inventory asset balances from the balance sheet, then average the twelve balances. A single snapshot misleads when you have seasonal builds. Set your carrying cost rate with finance and a target days of supply. The calculator returns turns, days, carrying cost and the excess against target. Use it at company level first, then repeat per location or product family from saved searches.

#### The formulas

**Body:** Turns equal annual COGS divided by average inventory value. Days of supply equals 365 divided by turns. Carrying cost is average inventory times the carrying rate. Inventory at target is COGS per day times target days; the excess is the amount above it, and the savings estimate is that excess times the carrying rate. These are the same ratios used in working capital reviews, so the numbers will reconcile with the days inventory outstanding that lenders and boards track.

**Bullets:**

- Use COGS, not sales, for the numerator
- Average inventory over the year, not one date
- Exclude consigned or customer-owned stock

#### Reading results

**Body:** Healthy turns vary by industry: high-mix, long-lead aerospace parts run lower than electronics assembly. Compare against your own history and similar businesses, not a generic benchmark. A rising days figure with flat sales usually means slow-moving or obsolete stock; falling turns with growing sales may signal safety stock inflation. Common mistakes are including WIP in one period and not another, and mixing currencies. Release of excess is only real if the stock can be sold, returned or consumed.

**Cta:** Netray can produce an item-level slow mover and excess list from live NetSuite data so the working capital number becomes a concrete action list.

**Faq:**

#### Which NetSuite reports give me the inputs?

**Answer:** The income statement provides COGS and the balance sheet provides inventory asset balances by month. Inventory valuation reports or saved searches give the same detail by item or location.

#### What is a good inventory turnover?

**Answer:** It depends on industry and mix. Compare against your own trend and peers. A high-mix build-to-order manufacturer will turn slower than a high-volume distributor, so a generic target can mislead.

#### Should WIP be included in inventory?

**Answer:** Be consistent. Many manufacturers calculate turns on finished goods and raw materials separately from WIP, because WIP depends on cycle time rather than stocking decisions.

#### How do I choose a carrying cost rate?

**Answer:** Add cost of capital, storage, insurance, handling, shrink and obsolescence as a percentage of inventory value. Rates between 15 and 30 percent are common, but your finance team should set yours.

## Search terms

inventory turnover calculator, days of supply calculator, days inventory outstanding formula, netsuite inventory turnover report, inventory carrying cost calculator, excess inventory calculator, inventory turns manufacturing

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