Calculate inventory days (DIO), average inventory, or cost of goods sold by selecting a solve mode and entering the other two quantities. Set the COGS accounting period; it defaults to 365 days. Holding time can be expressed in days, weeks, fixed-length months, or years.

Use inventory at cost and COGS in the same currency.

365 assumes annual COGS. Enter the actual period for shorter or leap-year accounts.

Related Calculators

Inventory Days (DIO) / Ncp Days Formula

The following formula is used to calculate Inventory Days (often called Days Inventory Outstanding, DIO) for a given Average Inventory and Cost of Goods Sold (COGS). The accounting period defaults to 365 days and can be changed to match the supplied COGS.

Ncp = (AI × P) / COGS

Variables:

  • Ncp is the number of inventory days (DIO); P is the number of days in the COGS accounting period
  • AI is the Average Inventory for the period (often estimated as (Beginning Inventory + Ending Inventory) / 2)
  • COGS is the Cost of Goods Sold for the same period (commonly annual COGS when using 365)

To calculate inventory days, multiply Average Inventory by the number of days in the COGS period, then divide by COGS. Use consistent inventory-at-cost valuations and the same currency. The default period is 365 days. Month and year output units use 365/12 and 365 days respectively, rather than calendar dates.

What is Ncp Days?

In this calculator, “Ncp Days” refers to inventory days, also known as Days Inventory Outstanding (DIO) or Days Inventory on Hand. It estimates the average number of days a company holds inventory before it is sold. Lower inventory days often indicate faster inventory turnover, while higher inventory days can indicate slower-moving inventory (though “better” depends on the business and stocking strategy).

How to Calculate Ncp Days?

The following steps outline how to calculate the Ncp Days.

  1. First, determine the Average Inventory (AI) for the period (often (Beginning Inventory + Ending Inventory) / 2).
  2. Next, determine the Cost of Goods Sold (COGS) for the same period (commonly annual COGS).
  3. Next, calculate inventory days using the formula Ncp = (AI * P) / COGS (or use the number of days in your period instead of 365).
  4. After inserting the values and calculating the result, you can check your answer with the calculator above.

Example Problem : 

Use the following variables as an example problem to test your knowledge.

Average Inventory (AI) = 50000

Cost of Goods Sold (COGS) = 100000

Ncp = (50000 × 365) / 100000 = 182.50 days