Silicon AnalyticaGlossary · Business & metrics
What are inventory days?
Inventory days estimate how many days of sales a company’s inventory would cover. The measure is usually calculated as inventory divided by cost of revenue for a period, multiplied by the number of days in that period.
Why it matters for investors
Rising inventory days can signal weaker demand or deliberate stock building ahead of expected growth; falling days can indicate tight supply or strong sales.
For chip companies, inventory held by distributors and customers matters too, and memory makers’ inventory levels are watched for signs of oversupply. Companies may calculate the measure differently, so the method should be checked.
Key companies
Related terms
General educational explanation. Information only, not investment advice.