Days In Inventory Ratio (DIIR) is an important measure of a business’s ability to manage its inventory efficiently. It’s calculated by taking the average number of days it takes a business to sell its inventory and dividing it by the cost of goods sold. A higher number indicates that it takes longer for a company to turnover their stock, suggesting that they may need to adjust their supply chain or look at alternative solutions. The goal is to keep Days In Inventory Ratio as low as possible in order to increase profits and reduce costs associated with holding onto products.