Days Inventory On Hand or Inventory Days is an important Activity Ratio.

Days Inventory outstanding basically indicates the number of days the company takes to sell its Inventory.

It also indicates the number of days money is blocked in Inventories.

Lower the number of days, better is the company’s Liquidity position.

If the ratios is relatively high, it indicates that the company is finding it difficult to clear off its stock timely.

This may further indicate about the current and future demand for the company’s products.

This Template can be used to calculate the Inventory Days Ratio easily..

Our article on Days Inventory On Hand covers this ratio in greater depth with meaning, interpretation and examples.

• Although we have used Walmart Inc financials to illustrate the calculations, you can use any company and arrive at the ratio.
• The Income Statement and Balance Sheet are presented as separate worksheets.
• Main calculation sheet automatically links the required numerator and denominator values from the financials and arrives at Inventory Days.