Days In Inventory using Inventory Turnover Formula

Days in inventory, also termed as Inventory Days of Supply (DoS), Days Inventory Outstanding or the Inventory Period. Given below days in inventory using inventory turnover formula is defined as (365 / Inventory Turnover). Its ratio measures the number of days funds are tied up in inventory. The larger the ratio, larger is the time period for a company to introduce new products into market. Just divide the number of days in the period divided by the inventory turnover ratio to calculate DII.

Formula:

Days in Inventory (DII) = 365 / Inventory Turnover

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This days in inventory using inventory turnover formula helps in calculating the company's ability to convert its inventory into sales as quick as possible. A slower turnaround on sales (Days in Inventory) indicate that there could be issues within the company, or issues with brand image or a industry slowdown.


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