Inventory Period Calculation

The inventory period in days represents how long a company's inventory is held before it is sold or used. The shorter the inventory period, the faster the company turns over its inventory.

The correct calculation for the inventory period in days is to divide 365 days by the inventory turnover ratio. This formula gives us the average number of days that inventory is held before being sold or used.

For example, if the inventory turnover ratio is 13.65909, we can calculate the inventory period in days by dividing 365 by 13.65909, which equals approximately 26.72 days.