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Definition

Days in inventory

A variant of the inventory turnover ratio is days in inventory that measures the average number of days inventory is held; calculated as 365 divided by the inventory turnover ratio.

For example, Wal-Mart’s inventory turnover of 7.8 times divided into 365 is approximately 47 days. This is the approximate time that it takes a company to sell the inventory once it arrives at the store.

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