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Questions and Answers
What is the Inventory Days Ratio?
What is the Inventory Days Ratio?
The Inventory Days Ratio is a financial metric used to measure the average number of days a company takes to sell its entire inventory.
What happens if the Inventory Days Ratio increases?
What happens if the Inventory Days Ratio increases?
If the Inventory Days Ratio increases, it indicates that the company is taking longer to sell its inventory, which may suggest overstocking, obsolescence, or declining sales.
What happens if the Inventory Days Ratio decreases?
What happens if the Inventory Days Ratio decreases?
If the Inventory Days Ratio decreases, it suggests that the company is selling its inventory more quickly, which could indicate efficient inventory management and strong sales.
