Inventory Turnover Period Calculator (Days Sales in Inventory)
Compute Days Sales in Inventory (DSI) to assess business liquidity. Includes industry benchmark comparisons for Retail, Tech, and Automotive sectors.
Financial Inputs
About
The Inventory Turnover Period, also known as Days Sales in Inventory (DSI), measures the average time required for a company to convert its stock into revenue. This metric is a primary indicator of operational efficiency and liquidity risk. A lower DSI generally indicates robust sales and efficient inventory management, minimizing holding costs and obsolescence risks.
However, an excessively low DSI might signal stockouts or lost sales opportunities. Conversely, a high DSI suggests overstocking or weak demand. This tool provides context by comparing your calculated DSI against standard sector benchmarks, helping you distinguish between healthy safety stock and capital inefficiency.
Formulas
The calculation uses the Average Inventory held during the period divided by the Cost of Goods Sold (COGS), multiplied by the number of days in the period (usually 365).
DSI = (Invbegin + Invend) ÷ 2COGS × 365
Where:
- COGS = Cost of Goods Sold (Annual)
- Inv = Inventory Value (Balance Sheet)
Reference Data
| Industry Sector | Avg Turnover (Days) | Efficiency Target |
|---|---|---|
| Grocery & Perishables | 5 - 10 | High Velocity |
| Retail (Apparel) | 30 - 60 | Seasonal |
| Consumer Electronics | 20 - 40 | Mod. Velocity |
| Automotive | 45 - 60 | Capital Intense |
| Industrial Machinery | 80 - 100 | Low Velocity |
| Construction Materials | 50 - 70 | Moderate |
| Furniture | 90 - 120 | Slow Moving |
| Restaurants | 4 - 8 | Just-In-Time |