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Everyone says,
DSI = average inventory ÷ cost of goods sold × 365Now my problem is about avg inventory and cost of goods sold.
Does average inventory means average inventory that we had each day ? And does cost of goods sold means average cost of goods sold per each day ?
Please explain this! Thanks very much
Average inventory is nothing to do with how many were sold. It is the average level of the goods held in inventory over the year.
The cost of goods sold is the total cost of what was sold during the year.
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