The Income|Outcome^® Contextuary

Ratio: Inventory divided by the Average Daily COS

where Average Daily COS = (Annual COS/365)

Example: The Round Number Company COS = 80; Inventory = 55 Average Daily COS = 80/365 = 0.22 Days Sales Inventory = 50/0.22 = 227 Days

The ratio shows how quickly inventories are converted into Cash.

Days Sales Inventory or Days Inventory Outstanding is part of the Cash Conversion Cycle.

Also called Days Inventory Outstanding or Days On Hand (DOH).