Inventory days
Average inventory divided by cost of goods sold for a matching period, multiplied by the days in that period. The ratio estimates inventory holding time on a consistent cost basis, not the literal age of every item.
Inventory days in round numbers
Hypothetical: average inventory is US$3m and annual cost of goods sold is US$24m. Using a 365-day year, 3 ÷ 24 × 365 = 45.625 days, approximately 45.6 days or 46 whole days.
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| Input or calculation | Value |
|---|---|
| Average inventory | US$3m |
| Annual cost of goods sold | US$24m |
| Days in period | 365 |
| Inventory days | 3 ÷ 24 × 365 = 45.625 ≈ 45.6 days |
Terms Related to Inventory days
Working capital · Inventory · Days sales outstanding · All of the glossary