Days sales in inventory definition including break down of areas in the definition. Analyzing the definition of key term often provides more insight about concepts. Days sales in inventory can be defined as: Estimate of number of days needed to convert inventory into receivables or cash; equals ending inventory divided by cost of goods sold and then multiplied by 365; also called days stock on hand. Days sales in inventory can provide an estimate of the number of nays it takes to get inventory turned over to a point of sale. This is a useful estimate and can provide some information to help estimate the cost of holding inventory.
