Restaurant Inventory Days on Hand Calculator

Estimates how many days of stock your kitchen is carrying, how many times inventory turns per year, and how much cash a leaner target would free, for owners and operators.

Your estimate

Current days on hand...

Inventory turns per year...

Cash freed at target...

Annual carrying cost saved...

Estimates only. Assumptions are listed below, and you can change every input.

Food cost percentage gets all the attention, but the dollars sitting in the walk-in and dry storage are just as real. A restaurant that carries three weeks of stock has cash tied up that could cover payroll or a repair, and older stock is the stock most likely to be wasted. The problem is that nobody knows the number. Inventory value is on a spreadsheet, weekly cost of goods is on a P&L, and the two rarely meet.

This calculator puts them together. It divides your inventory value by your daily cost of goods to get days on hand, and divides annual cost of goods by inventory value to get turns per year. Then it compares your current stock to the value you would hold at a target number of days and reports the difference as cash you could free, plus an annual carrying cost saved based on a rate you set. It works from the numbers you enter, so a rough inventory value gives a rough answer.

How to use this tool

Take the total value of your last full inventory count and enter it as inventory value on hand.
Enter a typical week's cost of goods used, which is opening inventory plus purchases minus closing inventory, and your weeks open per year.
Set a target days on hand and a carrying cost rate you believe in, then read days on hand, turns, cash freed and the annual carrying cost saved.

What the math assumes

Daily cost of goods is weekly cost of goods divided by 7, so days on hand is inventory value divided by that daily figure.
Inventory turns per year equal weekly cost of goods times weeks open, divided by the inventory value you enter, treating that value as typical for the year.
Cash freed is the difference between current inventory value and the value you would hold at the target days on hand; it never goes below zero.
Annual carrying cost saved is cash freed multiplied by the carrying rate you enter; the 20% default is only a starting point and you should replace it with your own estimate.
The calculator does not separate food from beverage or fast movers from slow movers; run it per category for a sharper picture.

Frequently asked questions

What is a reasonable number of days on hand for a restaurant?

It depends on delivery frequency, menu and storage space, so this calculator does not assume a benchmark. A kitchen with deliveries several times a week can often run leaner than one with a single weekly truck. Use the target field to test what a few days less would mean in dollars.

Why does days on hand matter if my food cost percentage is fine?

Food cost percentage tells you what you used. Days on hand tells you what you are sitting on. Two kitchens with the same food cost can have very different amounts of cash tied up and very different waste exposure, because older stock is the stock that spoils.

Should I use weekly purchases instead of cost of goods used?

Cost of goods used is more accurate because it accounts for stock going up or down. If you only have purchase totals, they are a fair stand-in over several weeks, but a big stock-up week will make days on hand look better than it really is.

What should I put for the carrying cost rate?

It is your own estimate of what a dollar of stock costs to hold for a year: spoilage, shrink, the cost of the money and the space. Some operators use a modest rate for shelf-stable goods and a much higher one for fresh product. If you are unsure, run the calculator with two rates and see the range.

Link to this toolhttps://parlevelr.com/tools/inventory-days-on-hand/

Free for readers and publishers alike. If you cite the result in an article, a link to this page helps others find it.

More free tools from ParLevelr

Restaurant Par Level Calculator: Estimates the par level, reorder point and cases to order for a single ingredient from its daily usage, delivery schedule and a safety buffer, for chefs and kitchen managers.
Kitchen Inventory Count Labor Cost Calculator: Estimates the hours and labor dollars a restaurant spends counting inventory each year, and what a faster count method would save, for managers weighing a change in process.

Never Run Out And Never Over Order

Restaurant inventory par levels and reorder alerts.

Start free trial