Ncp Days Calculator

Enter any two values (Inventory Days/Ncp Days, Average Inventory, and Cost of Goods Sold) into the calculator to determine the missing variable.

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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). This version assumes COGS is for a full year (365 days).

Ncp = (AI * 365) / COGS

Variables:

• Ncp is the number of inventory days (DIO)
• 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 the Average Inventory by 365 and then divide the result by the Cost of Goods Sold (COGS). If your COGS is not annual, replace 365 with the number of days in your COGS period.

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 * 365) / 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