This video show how to calculate Days to Sell Inventory, also known as Days Sales of Inventory or Days Sales in Inventory.

You calculate Days to Sell Inventory by dividing the number of days in the period (e.g., 365 if the period is one year) by the company’s Inventory Turnover (Inventory Turnover is the Cost of Goods Sold divided by the average inventory). The resulting figure is the number of days it takes the company to sell its inventory. This figure can be very useful; if it becomes very high (either relative to the company’s competitors, or as part of a trend over time) this could mean the company is having difficulty selling its inventory (some of the inventory might have become obsolete, requiring an inventory writedown).