The Days Inventory Ratio (DIR) is a metric used to measure the efficiency of inventory management. It helps calculate how many days worth of stock a company has on hand at any given time. The higher the number, the longer it takes a company to sell off its existing inventory. A lower DIR indicates that companies are managing their inventory better by selling off products at the right rate to take advantage of market trends. With increased precision in measuring inventory and calculating this ratio, companies can better understand their business, remain competitive and make informed decisions about how much product to keep on hand.