Inventory days - Revision history

imported>Doug Williamson: Mend link.

2022-07-01T16:51:36Z

Mend link.

← Older revision		Revision as of 16:51, 1 July 2022
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	* [[DPO]]		* [[DPO]]
	* [[Inventory]]		* [[Inventory]]
	* [[Inventory turnover]]		* [[Inventory turnover ratio]]
	* [[Management efficiency ratio]]		* [[Management efficiency ratio]]
	* [[Net working capital days]]		* [[Net working capital days]]

imported>Doug Williamson: Mend link.

2022-06-25T20:20:02Z

Mend link.

← Older revision		Revision as of 20:20, 25 June 2022
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	* [[Cost of goods sold]]		* [[Cost of goods sold]]
	* [[Creditors]]		* [[Creditors]]
			* [[Days sales outstanding ]] (DSO)
	* [[DPO]]		* [[DPO]]
	* [[DSO]]
	* [[Inventory]]		* [[Inventory]]
	* [[Inventory turnover]]		* [[Inventory turnover]]

imported>Doug Williamson: Add link.

2021-07-02T23:37:22Z

Add link.

← Older revision		Revision as of 23:37, 2 July 2021
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	* [[Inventory turnover]]		* [[Inventory turnover]]
	* [[Management efficiency ratio]]		* [[Management efficiency ratio]]
			* [[Net working capital days]]
	* [[Operating cycle]]		* [[Operating cycle]]
	* [[Payables management]]		* [[Payables management]]

imported>Doug Williamson: Layout.

2019-02-03T18:24:01Z

Layout.

← Older revision		Revision as of 18:24, 3 February 2019
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	Inventory days is a working capital management ratio calculated by dividing inventory outstanding at the end of a time period by the average daily cost of goods sold for the period.		Inventory days is a working capital management ratio calculated by dividing inventory outstanding at the end of a time period by the average daily cost of goods sold for the period.


	For example: a company holds on average £30,000 of stock over a year. It sells £300,000 of goods per annum.		For example: a company holds on average £30,000 of stock over a year. It sells £300,000 of goods per annum.
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	The inventory days are:		The inventory days are:

	30,000 / 300,000 * 365 = 36.5 days		(30,000 / 300,000) x 365

			= 36.5 days

imported>Doug Williamson: Create page. Source: DIO page.

2019-02-03T16:29:57Z

Create page. Source: DIO page.

New page

''Financial ratio analysis - management efficiency ratios.''

Inventory days is a working capital management ratio calculated by dividing inventory outstanding at the end of a time period by the average daily cost of goods sold for the period.

For example: a company holds on average £30,000 of stock over a year. It sells £300,000 of goods per annum.

The inventory days are:

30,000 / 300,000 * 365 = 36.5 days

A lower number of days is usually considered desirable, because it is a quick measure of the amount of stock held, although the business must also gauge the amount of stock required to meet customers’ delivery expectations.

Also known as Days inventory outstanding (DIO).

== See also ==
* [[Cost of goods sold]]
* [[Creditors]]
* [[DPO]]
* [[DSO]]
* [[Inventory]]
* [[Inventory turnover]]
* [[Management efficiency ratio]]
* [[Operating cycle]]
* [[Payables management]]
* [[Working capital]]

[[Category:Accounting,_tax_and_regulation]]
[[Category:The_business_context]]