Days inventory outstanding - Revision history

imported>Doug Williamson: Mend link.

2022-07-01T16:52:05Z

Mend link.

← Older revision		Revision as of 16:52, 1 July 2022
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	* [[Days sales outstanding]]		* [[Days sales outstanding]]
	* [[Inventory]]		* [[Inventory]]
	* [[Inventory turnover]]		* [[Inventory turnover ratio]]
	* [[Management efficiency ratio]]		* [[Management efficiency ratio]]
	* [[Operating cycle]]		* [[Operating cycle]]

imported>Doug Williamson: Layout.

2019-02-03T18:25:13Z

Layout.

← Older revision		Revision as of 18:25, 3 February 2019
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	Days inventory outstanding 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.		Days inventory outstanding 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.

	The days inventory outstanding are:		The days inventory outstanding are:

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

			= 36.5 days

imported>Doug Williamson: Create page. Sources: linked pages.

2019-02-03T16:32:17Z

Create page. Sources: linked pages.

New page

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

(DIO).

Days inventory outstanding 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 days inventory outstanding 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 Inventory days.

== See also ==
* [[Cost of goods sold]]
* [[Creditors]]
* [[Days payables outstanding]]
* [[Days sales outstanding]]
* [[Inventory]]
* [[Inventory turnover]]
* [[Management efficiency ratio]]
* [[Operating cycle]]
* [[Payables management]]
* [[Working capital]]

[[Category:Accounting,_tax_and_regulation]]