Days in Inventory Calculator
Answers the Question
How quickly can we sell what we have?
Calculator for Days in Inventory
What Is the Days in Inventory?
This formula reveals how many days are required for recapturing the dollars invested in inventory into revenue.
Why Is it Important?
- The shorter the days in inventory, the more rapidly a firm can reinvest its revenues into other investments or inventory.
Formula(s) to Calculate Days in Inventory
- DAYS INVENTORY = AVERAGE INVENTORY / COST OF GOODS SOLD * DAYS IN A YEAR
Common Mistakes
- Believing that reducing days in inventory to an absolute minimum is an absolute benefit. It may indicate that a firm is not willing to spend time to connect with shoppers who would be willing to pay higher prices.
Also Known As
- Average age of inventory
- Days inventory outstanding
- Days sales of inventory
- Inventory days of supply