Inventory
Stock coverage
How many days the stock you hold will last.
Formula
Units on hand ÷ units sold per day
Stock coverage is units on hand divided by units sold per day. It converts a stock level into the only unit that matters for reordering: time.
At zero velocity it is undefined rather than infinite, and should be shown as unknown.
Read it beside inventory value: high coverage on an expensive line is where working capital goes to sleep.
Related terms