Inventory days under a 365-day annual convention. This average does not show how long every individual item remains in stock.
Estimate the days of inventory represented by average stock value and annual COGS (cost of goods sold). Use cost values on both sides of the ratio.
Read the inventory holding period
Average inventory divided by annual cost of goods sold, multiplied by 365, gives inventory days. Use an inventory balance at cost rather than retail value. With average inventory of 70,000 and annual COGS of 900,000, the result is 28.3889 days.
Use the estimate in a stock review
Compare the result with lead time, demand variability and stock availability. A shorter holding period can reflect faster movement, but it can also leave too little cover for a supplier delay. Review slow-moving items separately because an aggregate average can conceal them.
Keep the reporting convention consistent
The model uses annual COGS and a fixed 365-day convention. Annualise the cost figure consistently before entry. It does not age individual lots or model seasonal purchasing.
Calculation rule
Result = [Average inventory at cost] ÷ [Annual COGS] × 365
Inputs and output
| Input | Example value | Entry convention |
|---|---|---|
| Average inventory at cost | 70000 | Enter the average inventory value at cost for the reporting period. Use the same currency as COGS. |
| Annual COGS | 900000 | Enter annual cost of goods sold in the same currency. A zero value makes inventory days undefined. |
Output: Inventory days under a 365-day annual convention. This average does not show how long every individual item remains in stock. Unit: days.
How to use the page
Collect the inputs
Gather Average inventory at cost, Annual COGS. Use one period and the units shown in the form.
Run the calculation
Enter the values and select the action. The calculation rule above explains how the inputs produce the result.
Compare a scenario
Change Average inventory at cost on its own, keeping the other inputs fixed. Read both results before changing another assumption.
Worked example
With the example inputs listed above, the result is 28.3889 days.
Change Average inventory at cost from 70000 to 77000 while keeping every other value fixed. The result becomes 31.2278 days. This comparison isolates that input; it does not forecast how other variables will respond.
Check the stated formula, units and limits before using the result in a decision.
Keep the displayed formula, input units and model scope with the result. Corrections or questions can be sent through the request section on this page.
Content updated: October 11, 2026