Business · Calculator companion · By K Imports
Stock turnover & DSO: practical guide
This guide explains how to use the Count.ie stock turnover & dso. Measure inventory days and customer payment collection time. Follow the inputs, method and worked example below, then compare your own scenario.
Guide written .
Open the Stock turnover & DSO calculatorWhat to prepare
- Gather supplier quotes, invoices, time records and the actual scope of the job or business decision.
- Separate revenue from VAT, direct costs from overheads, and profit from the timing of cash receipts.
- Use the same accounting period and currency for related inputs.
Understand the inputs
The calculation method
Inventory turnover = COGS ÷ average stock. DSO = average trade receivables ÷ credit sales × period days.
Worked example
Illustrative inputs and their result.
Example inputs
- Period COGS (€)
- 120000
- Opening stock (€)
- 20000
- Closing stock (€)
- 25000
- Credit sales for period (€)
- 200000
- Opening trade receivables (€)
- 15000
- Closing trade receivables (€)
- 20000
- Days in accounting period
- 365
Calculated example result
- Inventory Days
- 68.44
- DSO Days
- 31.94
How to interpret the result
A profitable estimate can still create a cash shortfall. Read the cost and timing assumptions as well as the headline profit, price or return; the result is a scenario, not a sales forecast.
Keep the scope constant while changing price, volume, supplier cost or time. A lower-sales or higher-cost case helps show whether the decision depends on an optimistic assumption.
Common mistakes to avoid
- Do not confuse markup on cost with margin on selling price.
- Include work that is easy to miss, such as travel, setup, rework and administration, where the model supports it.
- Do not treat tax collected or an unpaid invoice as freely available cash.
Assumptions and sources
Use credit sales for DSO. DSO measures receivables, not stock. Zero denominators return an unavailable metric rather than infinity.
If your case falls outside this scope, use a more suitable calculator or contact us about an unclear method.