Inventory Days Ratio Formula is a metric used to measure how long it takes a business to move their inventory, from the time it enters their warehouse or store until the time it is sold. It’s a useful way to assess the effectiveness of a company’s storage and stock management system, as well as its ability to quickly meet customer demand. The formula is simple — take the number of days in the given month (usually the previous month) and divide it by the value of your total inventory divided by cost of goods sold. This will give you the Inventory Days Ratio. The lower the result, the more efficient your inventory system is — and vice versa!