The formula for days sales in inventory formula is: DSI = (Ending Inventory / Cost of Goods Sold) × 365. This is the calculation that will indicate how long, on average, it would take to sell through the inventory on hand. To measure inventory between periods on a time basis, you divide ending inventory by the cost of goods sold and multiply by 365. DSI is necessary for checking how properly a company runs inventory and as a result help to establish any problems like overstocking or falling demand.

Visit us: https://accountinglads.com/days-inventory-outstanding/