# Days in inventory

﻿
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.[1]

## Notes

1. ^ Berman, K., Knight, J., Case, J.: Financial Intelligence for Entrepreneurs, page 149. Harvard Business Press, 2008.

Wikimedia Foundation. 2010.

### Look at other dictionaries:

• Days payable outstanding — (DPO) is an efficiency ratio that measures the average number of days a company takes to pay its suppliers. The formula for DPO is: where ending A/P is the accounts payable balance at the end of the accounting period being considered and COGS/day …   Wikipedia

• Days sales outstanding — In accountancy, Days Sales Outstanding (also called Days Receivables) is a calculation used by a company to estimate their average collection period. A low number of days indicates that the company collects its outstanding receivables quickly.… …   Wikipedia

• Inventory — means a list compiled for some formal purpose, such as the details of an estate going to probate, or the contents of a house let furnished. This remains the prime meaning in British English.[1] In the USA and Canada the term has developed from a… …   Wikipedia

• Inventory turnover ratio — is one of the Accounting Liquidity ratios, a financial ratio. This ratio measures the number of times, on average, the inventory is sold during the period. Its purpose is to measure the liquidity of the inventory. A popular variant of the… …   Wikipedia

• Days Sales Of Inventory - DSI — A financial measure of a company s performance that gives investors an idea of how long it takes a company to turn its inventory (including goods that are work in progress, if applicable) into sales. Generally, the lower (shorter) the DSI the… …   Investment dictionary

• Inventory Turnover — A ratio showing how many times a company s inventory is sold and replaced over a period. the The days in the period can then be divided by the inventory turnover formula to calculate the days it takes to sell the inventory on hand or inventory… …   Investment dictionary

• days' sales in inventory — The amount of inventory (stock) expressed in days of sales. For example, if 2 items a day are sold and 20 items are held in inventory, this represents 10 days (20/2) sales in inventory …   Accounting dictionary

• days inventory — The level of inventory expressed as its equivalent in days of a portion of cost of goods sold for the year. Calculated by multiplying inventory by 365 and then dividing that product by cost of goods sold. American Banker Glossary …   Financial and business terms

• Days' sales in inventory ratio — The average number of days worth of sales that is held in inventory. The New York Times Financial Glossary …   Financial and business terms

• days' sales in inventory ratio — The average number of days worth of sales that is held in inventory. Bloomberg Financial Dictionary …   Financial and business terms