if a company has a long inventory turnover
How long an average item stays in inventory. Another way to look at how quickly a company moves its inventory is with the inventory days, or days in inventory, measure. To find out the average number of days inventory is in stock, simply divide 365 by the inventory turnover ratio. The inventory days number measures how long it takes for a company to cycle through its inventory. The higher a companyâs inventory turnover, the lower its number of inventory days. A higher inventory turnover ratio indicates that inventory does not languish in warehouses or on the shelves. On one hand, too little inventory in stock could lead to lost sales if products are not there to meet customer demand.