Inventory Days is the number of days, on average, that your inventory is sitting in store waiting to be sold or used.
It’s a key number for managing the amount of cash tied up in inventory.
Inventory Days need to be calculated from other numbers you will find in the Profit and Loss and Balance Sheet, but the time taken to calculate them will return enormous dividends. Once you are in a position to know what the numbers are, then you need a strategy to improve them, as well as knowing if they are good or bad for your particular type of business.
