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Days Inventory – Meaning, Formula, Calculation & Interpretations [Video]

Days Inventory – Meaning, Formula, Calculation & Interpretations

This tutorial explains how to calculate Days Inventory in detail, including the formula, calculations, and interpretations. It discusses why days inventory is such an important indicator of a company’s inventory management. Thereafter, we will use the Colgate Case Study to calculate this ratio in Excel.
You can download the Colgate Days Inventory template from this link – https://www.wallstreetmojo.com/ratio-analysis-template/

What is Days Inventory?
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Days inventory indicates how long it takes a company to turn its inventory into sales.

Formula
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Days in Inventory Formula = 365 / Inventory Turnover

Uses
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– Days inventory ratio can be used to determine how long a company takes to manage and transform its inventory.
– Inventory turnover ratio and days inventory are both useful indicators of a company’s inventory management efficiency.
For more details, you can refer to our article – https://www.wallstreetmojo.com/days-in-inventory-formula/

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