Inventory Turnover Ratio Days Explained: Formula, Benchmarks & How to Improve It
How long does it take your business to sell through its inventory? That’s what the inventory turnover ratio days tells you. Also known as days inventory outstanding (DIO), this metric converts the inventory turnover ratio into an easy-to-understand timeframe.
For e-commerce merchants and retailers, inventory days are a practical way to see how efficiently stock is being managed and how much cash is tied up at any given time.
In this article, we’ll explain the formula, walk through examples, share industry benchmarks, and outline strategies to improve your results.
What Is Inventory Turnover Ratio Days?
The inventory turnover ratio days is the average number of days it takes for a company to sell through its inventory during a given period.
It’s essentially the flip side of the stock turnover ratio:
Turnover ratio = how many times inventory is sold and replaced.
Turnover ratio days = how many days it takes to sell inventory once.
👉 For a complete overview of essential KPIs, see Inventory Management Metrics.
Formula for Inventory Turnover Ratio Days
The formula is straightforward:
Inventory Turnover Ratio Days = 365 ÷ Inventory Turnover Ratio
Where:
Inventory Turnover Ratio = COGS ÷ Average Inventory
COGS = Cost of Goods Sold (not sales revenue)
Average Inventory = (Opening Inventory + Closing Inventory) ÷ 2
This formula shows how long, on average, inventory remains in stock before being sold.
Example Calculation
Let’s look at a simple worked example:
COGS: $500,000
Opening Inventory: $100,000
Closing Inventory: $150,000
Step 1. Calculate average inventory:
(100,000 + 150,000) ÷ 2 = $125,000
Step 2. Calculate inventory turnover ratio:
500,000 ÷ 125,000 = 4.0
Step 3. Convert to days:
365 ÷ 4.0 = 91.25 days
👉 On average, this business takes 91 days to sell through its stock.
Why Inventory Days Matter
Tracking turnover in “days” makes the metric much easier to interpret. Instead of abstract ratios, managers can quickly understand timelines:
How long cash is tied up in stock.
Whether inventory is moving too slowly (risk of obsolescence).
Whether inventory is turning too quickly (risk of stockouts).
It bridges operational management with financial performance.
Industry Benchmarks
Just like turnover ratios, inventory days vary by industry:
Fashion & Apparel: ~30–60 days (fast product cycles).
Electronics: ~60–90 days.
Furniture & Appliances: 100+ days (longer selling cycles).
⚠️ Remember: Benchmarks are industry-specific. A “good” number for one sector may be poor for another.
How to Improve Inventory Turnover Days
Lowering your inventory days means selling through stock faster and freeing up cash. Here are practical ways to improve:
Improve Forecasting
Predict demand more accurately using sales history and seasonal patterns.
Tools like Verve AI Forecasting automate this process.
Shorten Supplier Lead Times
Work with suppliers to reduce delivery timelines.
Enables leaner inventory with less need for safety stock.
Clear Slow-Moving Stock
Use promotions or markdowns to prevent stock from sitting too long.
Improves liquidity and keeps product mix fresh.
Plan Around Seasonality
Build inventory ahead of peak demand.
Reduce excess purchases in off-peak months.
Automated Replenishment
Ensure best-sellers are always stocked.
Prevents both stockouts and unnecessary build-up of inventory.
Common Mistakes in Using Inventory Days
Using sales revenue instead of COGS → Always use COGS for accuracy.
Ignoring seasonality → Inventory days will naturally fluctuate around holiday spikes.
Comparing across industries → A 100-day cycle may be normal for one sector and inefficient for another.
Conclusion
The inventory turnover ratio days translates abstract turnover ratios into a timeline that’s easy to understand and act upon. By knowing how long it takes to sell your stock, you gain clearer visibility into cash flow, efficiency, and profitability.
👉 Stop guessing how long inventory sits in your business. Track and improve your metrics automatically with Verve AI Forecasting.