Inventory Turnover Days Formula (also known as Stock Turnover Ratio) is a business metric used to measure the efficiency of a company’s inventory management process. It is calculated by dividing the cost of goods sold by the average inventory levels. The higher the ratio, the more quickly a company is able to convert their inventory into sales – and this indicates how efficiently a business is managing its stock levels. For example, if the Cost of Goods Sold was $10,000, and the Average Inventory was $2,000, then the Inventory Turnover Days Formula would be 5. This means that, on average, it takes about 5 days for a company to sell off all of its inventory.