Course Outline
Join PRO

What are the reasons for high inventory days?

Author:
Harold Averkamp, CPA, MBA

Definition of Inventory Days

I assume that inventory days is referring to the days’ sales in inventory. If so, then inventory days is also related to the inventory turnover ratio. For instance, when the inventory turnover is low, the days’ sales in inventory will be high. When the inventory turnover is high, the days’ sales in inventory will be low.

Examples or Reasons for High Inventory Days

Assume that a company maintains a constant quantity of items in inventory. If economic or competitive factors cause a sudden and significant drop in sales, the inventory days or days’ sales in inventory will increase.

Next, let’s assume that a retailer increases its inventory quantities for some new products and for some special promotions of existing products. If the sales do not increase, the inventory days or days’ sales in inventory will increase.

Join PRO to Track Progress

Features

Free

PRO

Lifetime Access (One-Time Fee)
Explanations
Quizzes
Q&A
Dictionary
Bookkeeping Video Training
Financial Statements Video Training
Visual Tutorials
Quick Tests
Quick Tests with Coaching
Cheat Sheets
Flashcards
Crossword Puzzles
Word Scrambles with Coaching
Bookkeeping Study Guide
Managerial and Cost Accounting Study Guide
Certificates of Achievement
Bookkeeping Certificate of Excellence
Business Forms
Printable PDF Files
Progress Tracking
Motivational Badges and Points
Motivational Medal Rankings
Motivational Activity Streaks
Public Profile Page of Achievements

About the Author

Harold Averkamp

For the past 52 years, Harold Averkamp (CPA, MBA) has
worked as an accounting supervisor, manager, consultant, university instructor, and innovator in teaching accounting online. He is the sole author of all the materials on AccountingCoach.com.

Learn More About Harold

Read 3,033 Testimonials

PRO for Teams
  • Easily onboard new users and team admins
  • Monitor individual user progress and grades
  • Monitor team progress and compare users
  • View average grades and find problem areas
  • Monitor recent activity and user achievements
PRO for Teams
Take the Tour Join Pro Upgrade to Pro