The Average Inventory Level Formula is a crucial formula used in business to calculate the average amount of inventory held by a company at any given point in time. This figure provides an indication of how much inventory a company is carrying, and how efficiently it manages that inventory. To calculate the Average Inventory Level Formula, simply divide the value of all inventory items (including raw materials, work-in-progress, and finished goods) by the number of days during which those items have been held. This provides an exact measure of a company’s inventory level and allows businesses to make informed decisions about their stock control strategies.