Days Sales of Inventory Calculator
Days Sales of Inventory (DSI) measures how many days it takes a company to sell its entire inventory. Also known as Days Inventory Outstanding (DIO), it indicates how efficiently inventory is being managed.
Input Parameters
Formula
DSI = (Average Inventory / COGS) × 365This formula calculates how many days worth of sales are held in inventory at any given time.
Variable Definitions
Days Sales of Inventory
Number of days to convert inventory to sales.
Average Inventory
Average inventory value over the period.
Cost of Goods Sold
Total cost of goods sold during the period.
Example Calculation
Scenario: A company has: - Average Inventory: $350,000 - Annual COGS: $2,000,000 DSI = ($350,000 / $2,000,000) × 365 = 63.9 days The company holds about 64 days worth of inventory.
How to Interpret Your Result
Understanding your DSI: • Lower DSI = faster inventory turnover = more efficient • Higher DSI = slower turnover = potential overstocking • Compare to industry benchmarks for context • Seasonal businesses may have varying DSI throughout the year