Days Sales of Inventory (DSI)

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.