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When are the days sales in inventory complete?

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Question added by Deleted user
Date Posted: 2013/06/29

DSI is a financial measure of a company's performance that gives investors an idea of how long it takes a company to turn its inventory (including goods that are work in progress, if applicable) into sales.
Usually a lower (shorter) DSI is seen as better, but it is important to note that the average DSI varies from one industry to another.
Here is how the DSI is calculated: Days Sales Of Inventory (DSI) = ( Inventory / Cost of Sales) *365 Please note that a lower DSI indicates a better performance (less losses on stock) but also increases the risk of losses when you run out of stock.

Bilal Mansour
by Bilal Mansour , Head of Internal Audit , Saudia Dairy and Foodstuff Co. (SADAFCO)

Cost of sales ($) / average inventory balance ($) = inventory turnover rate, then to find days sales in inventory:365 / inventory turnover.

Idrees Zafar
by Idrees Zafar , Senior Financial Analyst , Bayt.com

When the product is converted into sales (that is, the product is sold).

days inventory outstanding= (inventory/cost of sales)*no.
of working days in a year or365

Gauhar Ayub
by Gauhar Ayub , Finance Manager , Cornerstone Ventures

When the product Realize its value through its normal course of business.
in simple words it the inventory is sold.

Mohammad Al-Shayeb
by Mohammad Al-Shayeb , Finance Manager , Syriatel

Based on my understanding from the question, I believe that the term ( Days sales in inventory complete ) is same in principle with the term ( Inventory Turnover ), since both of the two terms indicate the required period ( or count of required times in a specific period) to sell all of the goods before buying new goods.
For example, X company have $7,500 cost of its goods sold and its average inventory through the year was $1,500.
Total inventory turnover is calculated as following : $7,500 Cost of Goods Sold / $1,500 Average Inventory Value =5 Times per Year to sell all the goods in the company stores, Then if we divided the figure5 into365 days we will arrive to73 required days of inventory on hand before the company sell it all.
Hope you find my answer is enough to answer your question.

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