days inventory


A measure of performance, calculated by average inventory divided by average daily cost of sales. This returns a figure equivalent to the number of days an item is held as inventory before it is sold. The lower the days inventory, the more efficient the company is, all other things being equal. Days inventory is the first step measured in the cash conversion cycle, followed by Days Sales Outstanding and days payable outstanding.
Browse Definitions by Letter: # A B C D E F G H I J K L M N O P Q R S T U V W X Y Z
days accounts receivable days payable