# Days’ Sales in Inventory Calculator

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Instructions:
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You can use our Days' Sales in Inventory Calculator, by providing the Cost of Goods Sold \((COGS)\), the current
inventory and the previous inventory in the form below:

## Days' Sales in Inventory Calculator

More about the
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Days' Sales in Inventory
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so you can better use the results provided by this solver. The Days' Sales in Inventory is the ratio between 365
and the inventory turnover. This ratio is a measure of asset management, and it indicates the average amount of
days it takes for inventory to be sold.

### How do you calculate days sales in inventory?

In order to compute the Days' Sales in Inventory, we first compute the inventory turnover using the following formula:

\[ \text{Inventory Turnover} = \displaystyle \frac{\text{Cost of Goods Sold}}{\text{Average Inventory}}\]Now, once we have the inventory turnover, we compute the Days' Sales in Inventory using:

\[ \text{Days' Sales in Inventory} = \displaystyle \frac{365}{\text{Inventory Turnover}}\]### Example of other financial calculators

The Days' Sales in Inventory is a broadly used financial ratio to measure efficiency in asset management. We provide many other financial ratio calculators in our site, including our current ratio , quick ratio , our days' sales in receivables , and our inventory turnover calculator.

### Example of day's sale in inventory

**Question**: Find the day's sales in inventory when the cost of goods sold is 3000, the current inventory is 1000,
the the previous inventory is 800. Assume 365 days.

Solution:

This is the information we have been provided with:

Cost of Goods Sold \(COGS\) = | \(\text{\textdollar}3000\) |

Current Inventory = | \(\text{\textdollar}1000\) |

Previous Inventory = | \(\text{\textdollar}800\) |

First, we need to compute the Inventory Turnover, which is computed using the following formula:

\[ \begin{array}{ccl} \text{Inventory Turnover} & = & \displaystyle \frac{\text{Cost of Goods Sold}}{\text{Average Inventory}} \\\\ \\\\ & = & \displaystyle \frac{\text{\textdollar}3000}{(\text{\textdollar}1000+\text{\textdollar}800)/2} \\\\ \\\\ & = & \displaystyle \frac{\text{\textdollar}3000}{\text{\textdollar}900} \\\\ \\\\ & = & 3.33 \end{array} \]Now that we have the inventory turnover, the days' sale in inventory is computed as follows: \[ \begin{array}{ccl} \text{Days' Sale in Inventory} & = & \displaystyle \frac{365}{\text{Inventory Turnover}} \\\\ \\\\ & = & \displaystyle \frac{365}{3.33} \\\\ \\\\ & = & 109.5 \end{array} \]

Therefore, the days' sale in inventory is \(109.5\), for the given cost of goods sold of \(COGS = \text{\textdollar}3000\), current inventory of \(\text{\textdollar}1000\), and previous inventory of \(\text{\textdollar}800\). This means that firm's inventory sits an average of \(109.5\) days, before it is sold.