Inventory Turnover by Industry (2025 Benchmarks)

Inventory turnover measures how many times a company sells and replaces its inventory in a year. The formula is simple: Inventory Turnover = COGS / Average Inventory. A reading of 8x means the company cycled through its entire stock roughly every 45 days. But “good” depends almost entirely on the sector — a 5x reading is excellent for an aerospace manufacturer and alarming for a grocery chain.

Above 10x — Efficient or commodity-driven. Utilities and Energy companies dominate the top of this table because they cycle physical commodities (fuel, refined products) very rapidly. For manufacturers and retailers, turns above 10x typically reflect lean inventory practices, fast product cycles, or strong demand. The risk at very high turns is stockout: too little inventory on hand to fill customer orders without delay.

5x to 10x — Healthy for most operators. The majority of well-run manufacturers, consumer companies, and tech hardware businesses operate in this band. Turns in this range balance carrying costs against service levels without tying up excess cash in slow-moving stock. Pair with the inventory turnover calculator to track whether a company is moving toward or away from its sector median.

Below 3x — Slow-moving or long-cycle by nature. Aerospace, defense, and heavy industrial companies legitimately run at 3x or below because their products take months or years to complete. For a consumer goods company or retailer, however, turns below 3x often flag overstocking, declining demand, or supply-chain inefficiency. Complement with Days Inventory Outstanding (365 / Turnover) to express the same metric in days on hand.