Days of supply is a metric that measures how long current inventory levels will last given the average daily
usage or sales rate. It provides a standard way to compare inventory levels across companies, industries,
or time periods. This metric is useful for benchmarking because it directly relates inventory levels to actual
usage rates, making it a more precise measure of inventory efficiency than other metrics like fill rate or net
asset turns.
CCC has days inventory outstanding, days sales and payables outstanding values in its formulae. A breakup of all this if available can be a good metric as it can talk of various parameters connected to the inventory position, negotiating power with the supplier/ distributors etc.
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