Days inventory

What is the Days inventory?

This is a parameter that shows the time in days that is spent turning a company's inventory into sales. It is not available for banks.

Formula:

Average inventories / Cost of goods sold * Days in period

What does the Days inventory mean?

This metric is an indicator of a company's inventory management. Low values are preferred for Days Inventory, which means items are selling faster and there is a quick turnaround. Large values indicate that a company has invested too much in stocks and does not have time to sell them.