Days Sales of Inventory (DSI) is a financial ratio that measures the average number of days it takes for a company to sell its entire inventory of goods during a specific period, typically one year. DSI is calculated by dividing the average inventory by the cost of goods sold per day or the average daily sales. A lower DSI indicates faster inventory turnover and more efficient inventory management, while a higher DSI may suggest inventory obsolescence, overstocking, or liquidity issues.

Demand Curves are graphical representations that illustrate the relationship between the price of a product or service and the quantity demanded by consumers in a market, holding other factors constant. Demand curves slope downwards from left to right, indicating an inverse relationship between price and quantity demanded, based on the law of demand. As the price of a product decreases, the quantity demanded increases, and vice versa, reflecting consumer preferences, purchasing power, and substitution effects. Demand curves are fundamental tools in microeconomic analysis and pricing strategies.

Depreciation is an accounting method used to allocate the cost of tangible assets over their useful lives, reflecting the gradual wear and tear, obsolescence, or loss of value due to usage or time. Depreciation expense is recorded on the income statement to reflect the portion of an asset’s cost that has been consumed during a specific accounting period, helping match expenses with revenue and accurately report financial performance.

Diversification is an investment strategy that involves spreading capital across a variety of assets, asset classes, industries, or geographic regions to reduce risk and optimize returns. By investing in a diversified portfolio, investors can mitigate the impact of individual asset volatility or market downturns and improve the overall risk-adjusted return potential. Diversification is a fundamental principle of modern portfolio theory.

Due Diligence is the process of conducting a thorough investigation or examination of a business, investment opportunity, or transaction before entering into a formal agreement or commitment. Due diligence aims to assess the accuracy, completeness, and reliability of information, identify risks, and evaluate the potential benefits and drawbacks associated with the deal. It helps parties make informed decisions, mitigate risks, and negotiate terms that protect their interests.