Inventory days and Investment: Difference between pages

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''Financial ratio analysis - management efficiency ratios.''
1. ''Economics''.
 
Inventory days 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.  
Expenditure by firms on (or creation by firms of) capital goods and stock to be used for future production or sale.
 
The inventory days are:


(30,000 / 300,000) x 365


= 36.5 days
2.  


More broadly, the expenditure of money or money's worth with a view to increasing over time the value invested.


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.


3.


Also known as Days inventory outstanding (DIO).
An asset held for the relatively longer-term, in the expectation of producing capital gains, income, or both.




== See also ==
== See also ==
* [[Cost of goods sold]]
* [[Active]]
* [[Creditors]]
* [[Aggregate demand]]
* [[Days sales outstanding ]] (DSO)
* [[Asset risk]]
* [[DPO]]
* [[Associate]]
* [[Inventory]]
* [[Cash investing in a new world]]
* [[Inventory turnover ratio]]
* [[Divestment]]
* [[Management efficiency ratio]]
* [[Injection]]
* [[Net working capital days]]
* [[Investment Committees]]
* [[Operating cycle]]
* [[Investment company]]
* [[Payables management]]
* [[Investment risk]]
* [[Working capital]]
* [[Investor]]
* [[Non-investment product]]
* [[Passive]]
* [[Payback period]]
* [[Robo-adviser]]
* [[Short-term investments]]


[[Category:Accounting,_tax_and_regulation]]
[[Category:Investment]]
[[Category:The_business_context]]

Revision as of 18:32, 30 July 2020

1. Economics.

Expenditure by firms on (or creation by firms of) capital goods and stock to be used for future production or sale.


2.

More broadly, the expenditure of money or money's worth with a view to increasing over time the value invested.


3.

An asset held for the relatively longer-term, in the expectation of producing capital gains, income, or both.


See also

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