Inventory Turnover Days Calculation

Professional Guide

This task helps accountants calculate inventory turnover days to evaluate how efficiently inventory is converted into sales. By relating cost of goods sold to average inventory, the metric provides insight into cash tied up in stock. It is widely used in working capital management, supply chain optimization, and financial benchmarking. The calculation is transparent and easy to audit, making it suitable for management reporting. Accountants can track trends over time to identify slow-moving inventory risks or improvements from process changes. When segmented by product or warehouse, it supports targeted operational decisions.