This worksheet from Quarryland Capital Group in Nogales, Arizona calculates inventory days outstanding from beginning inventory, ending inventory and cost of goods sold, then estimates holding cost. It is arithmetic only on the numbers you supply, not an offer, and it shows what a funding partner reading an inventory request will look at.
Inventory Days Outstanding Calculator for Nogales, AZ Businesses
The formula: inventory days outstanding (IDO), also called days inventory outstanding, equals average inventory divided by cost of goods sold for the period, times the number of days in the period.
- Beginning inventory at cost for the period.
- Ending inventory at cost for the period.
- Average inventory: beginning plus ending, divided by 2.
- Cost of goods sold for the same period.
- IDO: average inventory divided by cost of goods sold, times 365 for a year (or 90 for a quarter).
| Line | Illustration only, invented figures |
|---|---|
| Beginning inventory | $54,000 |
| Ending inventory | $66,000 |
| Average inventory | $60,000 |
| Cost of goods sold, year | $540,000 |
| Inventory days outstanding | 40.6 days |
Illustration only, invented figures: a Nogales, AZ parts store starts the year with $54,000 of stock at cost and ends with $66,000, so its average is $60,000. On $540,000 of cost of goods sold, IDO is 60,000 divided by 540,000, times 365, or 40.6 days (our arithmetic). In this invented example stock sits about 41 days before it sells.
An Inventory Holding Cost Calculator for Santa Cruz County, AZ Stock
Holding stock costs money even when nothing goes wrong: storage space, cooling, insurance, shrinkage, spoilage and the cost of the money tied up. A rough holding cost estimate multiplies average inventory by an annual holding rate you set from your own costs.
Illustration only, invented figures: if the parts store above puts its own holding costs at 25% of average inventory a year, holding $60,000 of stock costs about $15,000 a year (our arithmetic). In this invented example cutting average stock by a fifth would save about $3,000 a year.
Produce is a different case. Perishable goods carry spoilage risk on top of storage and cooling, so a produce house's IDO runs in days rather than months. Illustration only, invented figures: a distributor with $900,000 of annual cost of goods and an average of $45,000 in stock holds goods about 18.2 days (our arithmetic).
What a Partner Reads From Your Inventory Days in Santa Cruz County, AZ
A partner considering inventory financing uses IDO to judge how fast the goods it lends against turn back into cash. A shorter IDO means stock converts to sales faster; a rising IDO can mean slow-moving goods. Bring the IDO for the last two or three years, not one number.
Santa Cruz County, AZ had 102 grocery and related product wholesalers and 154 retail employers in 2023, including 33 clothing stores and 13 auto parts and tire stores (County Business Patterns): businesses for which this number shapes the request.
Where the Worksheet Stops for Nogales, AZ Owners
- It uses cost values, not retail prices; mixing the two distorts the result.
- It shows an average; a few slow items can hide inside a good overall number.
- It cannot say what a partner will advance against your stock.
- It is arithmetic on your numbers only, not an offer or a quote.
After the Estimate: Next Steps for Nogales, AZ Stock Buyers
With the IDO in hand, work out how much stock you need to fund and for how long. Working capital covers the broader gap between paying suppliers and getting paid; the retail page covers stores; the guides page lists the other tools.
By Quarryland Capital Group ยท Updated