average age of inventory Definition | Business Dictionaries from AllBusiness.com
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Business Definition for: average age of inventory
average age of inventory

number of days an average inventory item takes to sell:

Average Age of Inventory = Average Inventory
Cost of Goods Sold
x 365 days

For example, assume that average inventory is $47,500 and cost of goods sold is $500,000. The average age of inventory is ($47,500/$500,000) x 365 days = 34.7 days. See also days to sell inventory
Copyright © 2005, 2000, 1995, 1987 by Barron's Educational Series, Inc., Reprinted by arrangement with Publisher.

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