Days Inventory (also known as Inventory Days or Days on Hand) is a measure of how many days it would take a business to sell all of its current inventory. To calculate a company’s Days Inventory, divide the number of its total inventories by daily cost of goods sold. In other words, Days Inventory helps managers to quickly determine the relationship between their sales and the amount of inventory available. This gives them an idea of how long they can hold onto stocks without affecting the company’s cash flow. By tracking their inventory days, business owners can adjust production levels and purchasing in order to maximize profits.