So if I have 80 COGS a year and I have in my inventory 40,

that means that my days of inventory's half a year, 180 days, right?

In other words, like before, right, if I sell 100 euros a month and

I have 16 COGS and I have two months of inventory,

how much do you think I have in the inventory?

How much do you think?

I have 100 euros a month, 60 in cogs.

And then two months of inventory.

If in one month I have 60 cogs,

in two months I would be having 120 euros in the inventory.

I mean, it's pretty simple again, right?

But I am very interested in you getting the intuition of this.

Because as you agree with me as soon as you are done with a Coursera,

you will forget the formulas and you know it.

The important thing is that you keep the intuition, so that you can work out and

see a balance sheet and a P&L and

try to understand what are the mechanics and the dynamics behind that, right?

So is there a way to put this into a formula?

Yes, of course, but mentally what we've done is first, in the inventory,

there's a stat that we haven't sold.

Second what we're comparing is what we have in the inventory with our

COGS in the P&L.

Those are the two things that are in place.

So you have my daily COGS is X and I have in the inventory X,

my days of inventory would be 1, right?

So the formula is Inventory over Daily COGS.

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