Convert inventory into the average number of days stock sits before it is sold.
Dividing a balance-sheet stock by the daily flow that passes through it converts money into days. The turns figure is the same relationship inverted: how many times the balance is replaced over the period. Days measures are directly comparable across businesses of any size, and each day removed from the inventory cycle releases cash without needing new financing.
Days Inventory Outstanding
Days Inventory Outstanding = Average inventory ÷ Annual cost of goods sold × days in period
Days Inventory Outstanding = Average inventory ÷ Annual cost of goods sold × days in period Dividing a balance-sheet stock by the daily flow that passes through it converts money into days. The turns figure is the same relationship inverted: how many times the balance is replaced over the period.
Days measures are directly comparable across businesses of any size, and each day removed from the inventory cycle releases cash without needing new financing.
This calculator takes 3 inputs: Average inventory, Annual cost of goods sold, Days in the period. The pre-filled defaults are a realistic starting point — replace them with figures from your own environment for a result you can act on.