Inventory Turnover › Days Sales of Inventory
Days Sales of Inventory (DSI): Formula and Benchmarks 2026
DSI tells you how many days of cost-of-sales the inventory on hand would cover at the current sales rate. It is the time-domain reciprocal of inventory turnover and is the metric CFOs use to compare working-capital efficiency across periods and across companies.
Formula
DSI = (Average Inventory ÷ COGS) × 365
or, equivalently:
DSI = 365 ÷ Inventory Turnover
Use ending inventory if you want a snapshot at year-end. Use average inventory (opening plus closing divided by 2) if you want a smoothed annual figure that matches what analysts report. The two can diverge meaningfully for fast-growing or seasonal businesses.
Sector benchmark table
| Sector | DSI (days) | Turnover | Note |
|---|---|---|---|
| Grocery / supermarket | 24-28 | 13-15x | Perishables dominate the average. |
| Warehouse club | 28-34 | 11-13x | Pallet-on-floor, vendor logistics. |
| Drugstore (blended) | 32-37 | 10-12x | Pharma turns much faster than front-of-store. |
| Home improvement | 75-95 | 3.8-4.8x | Pro mix raises Home Depot; DIY mix slower Lowes. |
| Electronics specialty | 55-75 | 5-7x | Obsolescence discipline shortens days. |
| Apparel (specialty) | 85-115 | 3.2-4.3x | Season-bound; 12-16 week sell-through. |
| Footwear | 85-125 | 2.9-4.3x | Size matrix multiplies SKU count. |
| Furniture (full-service) | 95-130 | 2.8-3.8x | Container shipping cycle. |
| Auto parts aftermarket | 210-260 | 1.4-1.7x | Long-tail SKU strategy. |
| Jewelry | 240-310 | 1.2-1.5x | Display-driven; gold and gems hold value. |
Sources: SEC EDGAR 10-K filings cross-referenced with the sector turnover pages linked below.
Why CFOs use DSI alongside the cash-conversion cycle
The Cash Conversion Cycle (CCC) is the headline working-capital KPI for retail CFOs and is built from three components:
CCC = DSI + DSO − DPO
Where:
- DSI is Days Sales of Inventory (this metric)
- DSO is Days Sales Outstanding (receivables, usually near zero for cash-and-card retail)
- DPO is Days Payable Outstanding (how long the retailer takes to pay vendors)
Best-in-class retailers (Costco, Amazon) run negative cash-conversion cycles by combining short DSI with long DPO. Customers pay at the checkout (DSO near zero), but vendors are not paid for 30-60 days, financing inventory growth at zero cost. CFOs track DSI weekly because it is the primary lever within management control.