I am trying to calculate inventory days outstanding on a monthly basis when working on projections.
I know that how to calculate Inventory days for a year.
365/COGS/Average Inventory=Days outstanding
But, how do you calculate it on a monthly basis?
Instead of using 365, do I use 31 days/COGS for the month/Average Inventory?
Let’s say the opening Inventory is €1.000.000, closing inventory is €800,000.
COGS is 180,000.
Then the outcome would be 31/(180,000/(1,000,000+800,000)/2)=155 days
Does the result seem right?
Thank you in advance