What is the inventory weeks on hand formula?
Inventory weeks on hand is how many weeks current inventory would last at the recent rate of sales, measured at cost. It's calculated as inventory value divided by weekly COGS, where weekly COGS is COGS divided by days in the period, times seven. Too high ties up cash; too low risks stockouts.
Formula
Inventory value ÷ (COGS ÷ days in period × 7)
Example
A hypothetical outdoor gear brand holds $2,100,000 of inventory at cost at month-end. COGS for the 30-day month was $300,000, so weekly COGS = $300,000 ÷ 30 × 7 = $70,000. Inventory weeks on hand = $2,100,000 ÷ $70,000 = 30 weeks.
How to read it
Lower is better up to a point, because each extra week is cash sitting in a warehouse; too few weeks means stockouts and lost sales. Seasonality is the biggest trap: brands build inventory before peak season, so weeks on hand rises ahead of the holidays and falls after, and a slow month of sales inflates it. Account for long supplier lead times and inventory in transit before deciding a level is too high.
What moves it
- Size and timing of purchase orders and factory minimums
- Sales pace versus forecast
- Pre-season inventory builds for holidays or launches
- Slow-moving or discontinued SKUs that sit unsold
- Supplier lead times and how much safety stock is held
What to do when it's flagged
- Break inventory down by SKU and flag slow movers and aged stock
- Delay, reduce, or cancel open purchase orders where possible
- Plan markdowns, bundles, or off-price channel sales for excess stock
- Check the 13-week cash forecast for the cash impact and consider inventory financing
How Inflection tracks it
Inflection's KPI Monitor flags inventory weeks on hand as Watch above 26 weeks and Critical above 40 weeks by default; each client's thresholds are adjusted to their lead times and seasonality.
Inventory value comes from the QuickBooks balance sheet and COGS from the QuickBooks P&L, measured over the calendar days in the period.
Updated 2026-10-11. Example figures are hypothetical.