Which ratio indicates the average inventory relative to the cost of goods sold per day?

The ratio that indicates the average inventory relative to the cost of goods sold per day is known as the Days in Inventory. This metric provides insight into how long the inventory remains in stock before it is sold, essentially measuring the average number of days that items sit in inventory before being sold. It is calculated by taking the average inventory and dividing it by the cost of goods sold (COGS) per day. This calculation helps businesses understand their inventory management efficiency and how quickly they are able to turn their inventory into sales.

In contrast, the Inventory Turnover Ratio assesses how often inventory is sold and replaced over a period but does not provide a daily average. The Asset Utilization Ratio focuses on the efficiency of using assets to generate revenue rather than inventory specifics. The Working Capital Ratio deals with a company's short-term financial health and operational efficiency but is unrelated to inventory days or turnover.