The Days in Inventory (DI) is a financial metric that measures the average number of days it takes for a company to sell its inventory during a given period.
Formula: DI = (Average Inventory / COGS) * 365
Interpretation: A lower Days in Inventory ratio suggests faster inventory turnover and efficient inventory management.
Parameter
Description
Example Value
Average Inventory
The average inventory held by the company.
$50,000
Cost of Goods Sold (COGS)
The total cost of goods sold during the period.
$300,000
Days in Inventory
The average number of days that inventory is held before it is sold. Formula: (Average Inventory / COGS) * 365
