1. What Are Turnover Days?

Turnover Days measure how many days on average it takes for a company to sell its inventory or collect its receivables. It's calculated by dividing 365 days by the turnover ratio.

2. How Does the Calculator Work?

The calculator uses the Turnover Days formula:

Where:

• \( \text{Turnover Ratio} \) — The inventory or receivables turnover ratio
• \( 365 \) — Number of days in a year

Explanation: The equation converts the turnover ratio (which shows how many times inventory/receivables turn over per year) into days.

3. Importance of Turnover Days

Details: Turnover Days help businesses understand their operational efficiency. Lower inventory turnover days indicate faster sales, while lower receivables turnover days show faster collection from customers.

4. Using the Calculator

Tips: Enter your turnover ratio (must be greater than 0). The calculator will compute how many days on average it takes to turn over your inventory or receivables.

5. Frequently Asked Questions (FAQ)

Q1: What's a good turnover days number?
A: It varies by industry. Generally, lower is better for inventory (faster sales), but too low might indicate stockouts. For receivables, lower means faster collections.

Q2: How is this different from turnover ratio?
A: Turnover ratio shows turns per year while turnover days converts this to days, which is often easier to interpret.

Q3: Can I use this for accounts receivable?
A: Yes, the same formula applies to receivables turnover days.

Q4: What if my business is seasonal?
A: For seasonal businesses, consider calculating turnover days for specific seasons rather than annual.

Q5: How can I improve my turnover days?
A: For inventory: better demand forecasting, promotions. For receivables: stricter credit terms, early payment discounts.