Calculating Stock Days is a business metric that helps companies understand how quickly they are using their inventory. It is calculated by taking the average inventory over a given period and dividing it by the cost of goods sold during the same period. The result is expressed as a number of days; for example, if a company has an average stock level of $10,000 and its cost of goods sold is $2,000 per day, then it has 5 Stock Days of inventory on hand. By tracking this metric over time, businesses can make decisions about their inventory management that will help them maximize profits and customer satisfaction.
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