Days in inventory

Days in inventory(DII) is an efficiency ratio that measures the average number of days the company holds its inventory before selling it.

The formula for DII is:

$DII = \dfrac{average~inventory}{COGS/Days}$

where the average inventory is the average of inventory levels at the beginning and end of an accounting period, and COGS/day is calculated by dividing the total cost of goods sold per year by 365 days.

See also

• Working capital analysis
• Days Sales Outstanding
• Days Payable Outstanding
• Cash Conversion Cycle

External links

• Basic Instruments of Working Capital Management